Arc Resources Ltd (ARX-T)

Attachie, a growth project, has superb economics. They have about 4 or 5 more buried in their portfolio. Exposure to condensates, but it's really a gas play. Outlook for Canadian nat gas is meaningfully improving as LNG Canada comes on. (This is as long as producers show discipline and don't flood the market.) Conservative management, which is what you want in this climate.

Stands out as a really good value proposition, which he thinks will attract US investors when they realize there's nothing left to buy in the USA. Believes embedded resource value will be realized by somebody down the road. Yield is 2.96%.

Has more embedded growth due to assets they own, with a bit more wet gas linked to condensate and oil prices. Likes its assets.

He likes the idea of adding on weakness, that's what he's been doing. He uses a lot of optionality in his portfolios. So he's writing puts in the energy sector to acquire companies; if they don't go to those prices, he just earns the income. He's perfectly happy with a strategy like that at this point.

If we get a harder economic landing at some point, then oil has some more downside. The US outlook for crude oil demand was just downgraded. We're in a trading range, and he's accumulating into weakness.

(Note the short timeframe.)  Energy's been under a bit of pressure lately. Still nothing wrong with the chart. Could pull back a bit more, but the trend is up. Great company. Fundamentally, one of the best. 

Best way to get Canadian nat gas exposure. They just signed a deal with Exxon, selling 25% of nat gas at international prices. Have deep, deep inventory. Is cheap to US peers. Pays a 3% dividend. He's bullish natural gas given AI and data centres.

EPS of 63c beat estimates of 53c. Revenue of $1.42B beat estimates of $1.38B. EBITDA of $881M beat estimates by 13%. Profit fell 27% despite higher production, due to lower prices. Production rose 4.7% year-over-year. Production matched estimates. EPS does call for lower income in 2025 but we think this is well-reflected in its low valuation. Overall, we are comfortable. 
Unlock Premium - Try 5i Free

Among the best-managed in Canadian energy. Likes the balance of owning infrastructure, condensate production (prices could rise during tariffs) and LNG development on the west coast.

Excellent company. One of the better operated companies in the Canadian basin. Would wait on Trump tariff announcement before buying. Overall, a very good company. 

The price of oil always gets pulled around. He likes the natural gas side a bit more -- it's been through a bear market for years and now coming out of that. Over time, increased ability to get nat gas offshore and the world needs it.

But if you go 100% natural gas it's more risky. So, be more diversified but with a tilt to gas. He likes names that are cheaper than they ought to be. For him that's ARX or, for more torque, AAV.

Whether to sell depends on whether it's in a non-registered account, are you going to be paying tax, and how big is your position. 

Pays a nice dividend, boosted by 12%. Beat on Q3. Higher production, lower cost. Great assets and operators. 8% shareholder returns. Cheaper than it ought to be, with good production and cashflow growth. Good balance sheet. If you want an oil and gas name, this is one to really consider. But he's not keen on oil here.

Metals and oil/gas are his favourite areas. Arc is heaver in natural gas, which is doing well now given the cold weather. The chart has moved strongly up, then pulled back and find support at the old break-out point. Add shares at the break-out point.

Will benefit along with others from LNG Canada. Wet gas, so you get the NGL plus the condensate. Long reserve life of assets.

Probably his favourite energy stock. Great chart. Consolidating, will probably break out at some point. As long as it doesn't break the low around $22.50, stay in the trade.

We feel the outlook for natural gas in the coming year is met with moderate growth, and potential lots of volatility. Underlying global natural gas demand should increase, and the completion of Canada's LNG pipeline to the Pacific could improve ARX's profitability. Its recent momentum has been positive, and it offers a decent yield (2.7%) with a solid valuation of 10.5X forward earnings. Growth is expected to be decent in the coming years, and its profit margins are healthy. We think it looks OK here, although, it is expected to be volatile and it needs to resume its topline growth. For an investor that is bullish on the outlook for natural gas, we would be OK accumulating here.
Unlock Premium - Try 5i Free

Just broke out, almost an anomaly in the oil patch. Exceptional chart; looks very, very good. After a beating in 2022, chart for nat gas is now in a holding range and at the top of that range. Yield is 2.4%.