Arc Resources Ltd (ARX.TO)

(A Top Pick Nov 8/16. Down 19%.) The whole energy complex has come down. Despite the fact that this is 70% natural gas and only 30% oil, it traded like an oil stock. In spite of being the best capitalized, one of the best run, and with great properties, especially in the Montney region of BC, it got sold off. The new BC government is against fracing, LNG, etc. It seems to have bottomed, which is a great buying opportunity.

(Market Call Minute.) Kind of a granddaddy of Montney. They’ve been in the play for a long time. He is kind of looking for a consistent 12% kager (?) and growth over the next 4 years. All the infrastructure is locked in. Has a beautiful yield.

Oil and gas company, mostly natural gas, mostly in BC. A lot of that is explaining why it is acting as it is in the short term. It has a secure dividend. The problem is that it is in BC. He likes natural gas. Buy things when they are beaten up.

Montney area, 70% gas. He thinks the outlook for gas is better than oil. It has been hurt by the fact that they are a BC energy producer. We are closer to the bottom than the top in this industry. (Analysts’ target: $22.50).

Largely a natural gas company, largely in British Columbia. He prefers natural gas to oil. The outlook for natural gas is on “shortages of being able to be delivered”. A well-run company with a good balance sheet and good properties, largely in BC. When he bought this, there was a Liberal government that was open to resources and LNG, and now there is a coalition government who are against resources, and that is affecting the BC producers.

It was a in a downtrend and then made a base. It started taking out old highs, was moving up and then it hit a bit of a lid and took out a previously low, so it is starting a new downtrend. It may be basing again. It is too early in the basing phase, if it is basing.

The company has reshaped itself after its particular crisis about 1.5 years back, and are operating quite comfortably, but isn’t cranking the handle for everyone. In the long-term, this will continue to be one of the majors. If you want to be in the sector, then continue to hold.

Sell holdings? She actually added a bit to her holdings in December when OPEC 1^st announced the production cuts. A very low cost producer and in a very attractive region in the Montney. Have a very strong balance sheet, stronger than its peers. She would not sell this, and is hoping for improved energy prices over the next 6-12 months.

Has been dramatically underweight in the energy space. He started the year with a view that oil was going to be $45-$55 for this year. Bargains are starting to appear. In the oil patch, this is one of those names he would be looking at. It’s liquid and it is well run.

This has been a disappointment. On a seasonal basis, energy stocks like this, particularly the gassy ones, do very well from around the end of January right through until the middle of May. This year, it is just not doing it. Technically it is in a downward trend and underperforming the market. Look for better opportunities elsewhere.

The fact that the chart has been moving downwards, at the time that natural gas has been going up, is not a good sign. Wait for it to start to show positive absolute performance.

A great, long term story, although the chart looks awful. It has a good yield and it is extremely well-managed.

Low cost natural gas producer. Very efficient and very reliable growth. Production has steadily increased every year since 2012. Relative to the group, the valuation is okay. Great balance sheet, which is key in the oil names. A quality name, and probably an opportunity here.

The grandfather of the Montney play in terms of a very well-run company. A very disciplined management team and a strong balance sheet. The issue is really just gas prices. They have a great growth plan to grow from their 120,000 BOE a day, and have the ability to get their product to market. The biggest risk is really just gas prices.

You can’t fault them as a company. His problem is that you pay a premium. If you are very bullish, this is not the one to own, but you can sleep at night with this one.