Arc Resources Ltd (ARX.TO)

He sees EPS growth 2012-2014 of 26%. They displayed very good budget discipline and very impressive growth. Their Montney visibility continues. Very solid balance sheet. Very good metrics. This is one of the ones to own in the natural gas space. His target is $32. 4% dividend yield.

Approaching the top of its channel and he can see $31-$32 a year from now, so not much growth from here. This is a gas/oil, mix of 60/40. Decent dividend of around 4%. Prefers this one over Inter-Pipeline (IPL-T).

A more conservative way to play energy. Fairly equally balanced between oil production and gas production. Have one of the largest land positions in northeast BC, a liquids rich area in the Montne. Likely to get pipeline access in the future for LNG. Ultimately, it could be a takeover or continue to drive earnings growth.

(Market Call Minute.) Prefers some of the US-based higher growth oil/gas companies. This is performing well though.

(Market Call Minute) Steady eddie 4% yield plus 10% growth.

Not a low-cost producer and there is a surfeit of natural gas, which is increasing. In the event that a LNG terminal is built in BC and provides a new market for all the natural gas that is being produced, that is very positive for companies like this. However, this is probably 5 years before that comes in to realization. In the meantime, finding costs are high and they are having a hard time competing.

Has been basically out of gas stocks, except for a small holding in this one. This has one of the best managements in the patch and has done very well. They are also into gas liquids which has helped. From a bottom-line standpoint. Gas is not going to be a good area to operate in for some time. It’s not the companies, just that there is a lot of gas. Until we can ship gas offshore (LNG), the gas industry is going to be facing some problems.

Oil prices did well but gas has not. Temporary problem in western Canada and that will solve itself over the next couple of months. High quality name. Pick away at it when you get your chance.

Very well regarded management team. Have 10-15 year plus drilling inventory. Stock is down about 12% from recent highs. Yield of 4.68%.

Gas weighted and has been affected by the lower natural gas prices that are realized in Canada. US has enough natural gas that they don’t require as much import from Canada. That, coupled with the tolling that pipelines have been charging, makes it harder to get natural gas out of Canada. As a natural gas company it is a good one to hold onto. Nice 5% yield and generates good cash flows. Have hedged out nat gas prices at well north of $4.

[Caller wanted to switch to Gibson] Never make decisions on short term performance. Likes ARX. Under pressure and is one of the few gassy stocks he holds. When the yield got down because the price was up, he took a little off the top. One of the best managed companies in the sector. The price of Gas is back under $3 and it is hard to make money at this level. He doesn’t see it changing. These guys have always done a good job and are bringing on some production at a low cost in the next year. If it gets lower he may add some back.

Good management with a very disciplined approach in allocating capital. Extraordinarily good balance sheet. Fairly low decline rate. Valuation is high. Good record of increasing dividends.

Seasonally does well from Mid-July to until October. Did that last year. We have not seen this in 2013. It is in a downward trend, in, below 20 day moving average and underperforming the TSX, so not a buy.

Sold the last this morning. Great gas assets but technically the stock is breaking down here. Don’t fight the sector.

Cautious on a name like this because the price of natural gas in Canada today is much less than what many people perceive. This is because of the basis differential, the difference between natural gas prices in Alberta relative to other benchmarks and is very, very wide. Good management and the asset base is super quality but is trading at a very high multiple. He doesn’t believe in $5-$6 natural gas. He thinks it is capped at $4-$4.50 for many years to come, even with LNG.