Arc Resources Ltd

ARX-T

TSE:ARX

6.60
0.07 (1.07%)
ARC was founded in 1996 as a royalty trust with the acquisition of 21 properties from Mobil Oil Canada. The acquisition was funded by an initial IPO of $180 million on the Toronto Stock Exchange.
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Analysis and Opinions about ARX-T

Signal
Opinion
Expert
COMMENT
COMMENT
August 1, 2018

Do not have a final investment decision on the LNG plant project yet. Should have a decision on this project sometime this year. Most are thinking the big LNG plant will get built. Most western Canadian natural gas stocks are very cheap. Western Canada is awash in natural gas and North America does not need it. If LNG gets exported globally, will see an enormous boom. Arc is a low cost, high quality operator in this area and may be some merit to own a small position in hope the plant gets built. There is an element of speculation.

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Do not have a final investment decision on the LNG plant project yet. Should have a decision on this project sometime this year. Most are thinking the big LNG plant will get built. Most western Canadian natural gas stocks are very cheap. Western Canada is awash in natural gas and North America does not need it. If LNG gets exported globally, will see an enormous boom. Arc is a low cost, high quality operator in this area and may be some merit to own a small position in hope the plant gets built. There is an element of speculation.

COMMENT
COMMENT
July 20, 2018

Should get LNG positive approval next Friday. All the signs are there. But will service stocks go up as well?

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Should get LNG positive approval next Friday. All the signs are there. But will service stocks go up as well?

DON'T BUY
DON'T BUY
July 17, 2018

His model price is $13.66, so he seeks the stock as almost 6% overvalued. They pay out as much as analysts expect them to earn. There is better value in American stocks.

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His model price is $13.66, so he seeks the stock as almost 6% overvalued. They pay out as much as analysts expect them to earn. There is better value in American stocks.

TOP PICK
TOP PICK
July 16, 2018

It's one of the better-financed oil companies and a strong balance sheet. It has long-life properties to develop. Pays over 4% yield. (Analysts' price target: $18.03)

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It's one of the better-financed oil companies and a strong balance sheet. It has long-life properties to develop. Pays over 4% yield. (Analysts' price target: $18.03)

WATCH
WATCH
July 9, 2018

It is attempting to break its downtrend and to base. You want to see it break $15. If it does that and stays for a couple of days you could step in.

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It is attempting to break its downtrend and to base. You want to see it break $15. If it does that and stays for a couple of days you could step in.

PAST TOP PICK
PAST TOP PICK
July 4, 2018

(A Top Pick July 25/17 Down 19%). It is a BC based natural gas producer that has been disappointing due to the lack of takeaway capacity. There is a possible BC LNG facility being talked for the market and demand is growing in North America for natural gas. It is not the time to sell. He likes the yield.

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(A Top Pick July 25/17 Down 19%). It is a BC based natural gas producer that has been disappointing due to the lack of takeaway capacity. There is a possible BC LNG facility being talked for the market and demand is growing in North America for natural gas. It is not the time to sell. He likes the yield.

TOP PICK
TOP PICK
July 3, 2018

Over 60% of their revenues are oil based and represents over 75% of their revenues. There is upside if there is a positive FID for the BC LNG project by Shell. He thinks it has one of the best management teams. Yield 4.5%. (Analysts’ price target is $17.86)

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Over 60% of their revenues are oil based and represents over 75% of their revenues. There is upside if there is a positive FID for the BC LNG project by Shell. He thinks it has one of the best management teams. Yield 4.5%. (Analysts’ price target is $17.86)

DON'T BUY
DON'T BUY
June 26, 2018

Projected earnings for 2019 are lower than 2018. His model price is 4% lower than the current price. The yield is barely supported by earnings. There is better value elsewhere and the stock is out of favour.

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Projected earnings for 2019 are lower than 2018. His model price is 4% lower than the current price. The yield is barely supported by earnings. There is better value elsewhere and the stock is out of favour.

TOP PICK
TOP PICK
June 25, 2018

He expects Shell to go positive on their investment decision in LNG on the West Coast. That will cause a re-rating on gas stocks. (Analysts’ target: $17.97).

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He expects Shell to go positive on their investment decision in LNG on the West Coast. That will cause a re-rating on gas stocks. (Analysts’ target: $17.97).

DON'T BUY
DON'T BUY
April 17, 2018

Very well respected, they drill some of the most economical wells in the country, it trades at a premium because people have been hiding in this stock. Other companies have more potential to rise because they were more beaten down.

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Very well respected, they drill some of the most economical wells in the country, it trades at a premium because people have been hiding in this stock. Other companies have more potential to rise because they were more beaten down.

TOP PICK
TOP PICK
April 5, 2018

It is a higher quality producer in the top 15%. A good payout ratio. It is a high quality energy pick. They are not subject to transportation problems. (Analysts’ target: $18.01).

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It is a higher quality producer in the top 15%. A good payout ratio. It is a high quality energy pick. They are not subject to transportation problems. (Analysts’ target: $18.01).

DON'T BUY
DON'T BUY
March 19, 2018

It has a very established down trend. He would need to know the composition of the balance sheet. He thinks you should leave it alone as he does not see a technical bottom forming yet.

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It has a very established down trend. He would need to know the composition of the balance sheet. He thinks you should leave it alone as he does not see a technical bottom forming yet.

BUY WEAKNESS
BUY WEAKNESS
March 16, 2018

The price is coming close to book value of $10.37. The balance sheet is in good shape and he likes management. Hold off until it falls closer to book value. Yield 4.5%.

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The price is coming close to book value of $10.37. The balance sheet is in good shape and he likes management. Hold off until it falls closer to book value. Yield 4.5%.

BUY
BUY
February 22, 2018

[Is the true value of the natural gas deposits included in their book value? Also, the outstanding shares keep rising, so wouldn't that dilute current shareholders?]The value of the properties they own are included in book value. It's not a market value but an historical cost value. Correct, it becomes dilutive, when there are more shares outstanding the book value per share declines. It becomes dilutive if they back stock at a premium. He likes Arc and has made it a top pick in the past. It's a low-cost gas producer that had a good Q4. A secure dividend and well-run. 4.7% yield

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Arc Resources Ltd (ARX-T)
February 22, 2018

[Is the true value of the natural gas deposits included in their book value? Also, the outstanding shares keep rising, so wouldn't that dilute current shareholders?]The value of the properties they own are included in book value. It's not a market value but an historical cost value. Correct, it becomes dilutive, when there are more shares outstanding the book value per share declines. It becomes dilutive if they back stock at a premium. He likes Arc and has made it a top pick in the past. It's a low-cost gas producer that had a good Q4. A secure dividend and well-run. 4.7% yield

PAST TOP PICK
PAST TOP PICK
February 16, 2018

(A Top Pick Feb. 10/17 Down 36%) There has been a lot of pain in this space and he feels it has been punished more than it should. Natural gas prices have taken a severe hit and there has been problems getting gas to market. However, 26% of their revenues come from natural gas liquids and only 5% of their production is in Alberta. They have been able to replace 300% of their reserves. A well-run company, but in a tough sector. His advice is to hold and he feels the dividend is safe. Yield 4.7%.

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Arc Resources Ltd (ARX-T)
February 16, 2018

(A Top Pick Feb. 10/17 Down 36%) There has been a lot of pain in this space and he feels it has been punished more than it should. Natural gas prices have taken a severe hit and there has been problems getting gas to market. However, 26% of their revenues come from natural gas liquids and only 5% of their production is in Alberta. They have been able to replace 300% of their reserves. A well-run company, but in a tough sector. His advice is to hold and he feels the dividend is safe. Yield 4.7%.

WATCH
WATCH
February 12, 2018

They continue to grow their production. 29% liquids. The balance sheet is in good shape.

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Arc Resources Ltd (ARX-T)
February 12, 2018

They continue to grow their production. 29% liquids. The balance sheet is in good shape.

COMMENT
COMMENT
February 9, 2018

Effectively a liquid producer in drag. It is a name with a management team well regarded. It doesn’t have the beta that he wants. Very good well productivity. Very good quality in their acreage. Probably not one bad thing you can say about the company.

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Arc Resources Ltd (ARX-T)
February 9, 2018

Effectively a liquid producer in drag. It is a name with a management team well regarded. It doesn’t have the beta that he wants. Very good well productivity. Very good quality in their acreage. Probably not one bad thing you can say about the company.

WAIT
WAIT
February 5, 2018

Gas has been weak so they did badly. She has been wanting to add this because they are a solid name at a 52 week low. Her clients are more focused on short and medium term gains, however. If we get through the next month or two without a decline in gas prices, it could be time to buy.

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Arc Resources Ltd (ARX-T)
February 5, 2018

Gas has been weak so they did badly. She has been wanting to add this because they are a solid name at a 52 week low. Her clients are more focused on short and medium term gains, however. If we get through the next month or two without a decline in gas prices, it could be time to buy.

PARTIAL BUY
PARTIAL BUY
January 26, 2018

The effective payout ratio is 142% for 2017, which is something not sustainable. However, their balance sheet isn't bad, trading at 2.2X 2019 debt to cash flow. Valuation has improved quite a bit. It’s a high, high quality company that has just been caught in the middle of the storm with ECO prices having dropped the way they have. He models 10% production growth over the next few years. They have great assets and are very capital efficient. In a taxable account, it’s something you could be nibbling on. Dividend yield of 4.3%.

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Arc Resources Ltd (ARX-T)
January 26, 2018

The effective payout ratio is 142% for 2017, which is something not sustainable. However, their balance sheet isn't bad, trading at 2.2X 2019 debt to cash flow. Valuation has improved quite a bit. It’s a high, high quality company that has just been caught in the middle of the storm with ECO prices having dropped the way they have. He models 10% production growth over the next few years. They have great assets and are very capital efficient. In a taxable account, it’s something you could be nibbling on. Dividend yield of 4.3%.

TOP PICK
TOP PICK
January 23, 2018

This has been punished recently and it has pulled back. Yet it has some of the highest quality, long life assets amongst the choices out there. It also has an extremely strong balance sheet. Debt to cash flow is under 1.5X, significantly below its peers. Has a good growth profile going forward. Dividend yield of 4.5%. (Analysts’ price target is $20.)

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Arc Resources Ltd (ARX-T)
January 23, 2018

This has been punished recently and it has pulled back. Yet it has some of the highest quality, long life assets amongst the choices out there. It also has an extremely strong balance sheet. Debt to cash flow is under 1.5X, significantly below its peers. Has a good growth profile going forward. Dividend yield of 4.5%. (Analysts’ price target is $20.)

DON'T BUY
DON'T BUY
January 17, 2018

One of the best houses in a bad neighbourhood. A very high quality natural gas operator in Western Canada, in the Montney. They are producing in Alberta and British Columbia, were natural gas prices are nowhere near what they are getting for New York Mercantile gas. There is an excess supply of natural gas being produced in Western Canada. He’s generally vacated the gas producer space for the time being. He wouldn't be a buyer.

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Arc Resources Ltd (ARX-T)
January 17, 2018

One of the best houses in a bad neighbourhood. A very high quality natural gas operator in Western Canada, in the Montney. They are producing in Alberta and British Columbia, were natural gas prices are nowhere near what they are getting for New York Mercantile gas. There is an excess supply of natural gas being produced in Western Canada. He’s generally vacated the gas producer space for the time being. He wouldn't be a buyer.

PAST TOP PICK
PAST TOP PICK
December 28, 2017

(A Top Pick Feb 10/17, Down 26%) He tax loss sold it and then bought it back yesterday. It is a good energy company with an excellent balance sheet and excellent properties. No one cared about energy this year and it was out of favour. Canadian Natural Gas prices were quite poor this year. The worst is behind it, however.

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Arc Resources Ltd (ARX-T)
December 28, 2017

(A Top Pick Feb 10/17, Down 26%) He tax loss sold it and then bought it back yesterday. It is a good energy company with an excellent balance sheet and excellent properties. No one cared about energy this year and it was out of favour. Canadian Natural Gas prices were quite poor this year. The worst is behind it, however.

COMMENT
COMMENT
December 20, 2017

In terms of who is the best in consistency and track record, it is probably this company. It’s not just natural gas price in a company like this. They have much more exposure to getting the oil price as well as the natural gas price. However, gas is so low he had hoped he could get these things at a decent valuation. Because the company has done so well, it still has a premium valuation. He thinks he has a more consistent story out of Cenovus (CVE-T). (See Top Picks.)

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Arc Resources Ltd (ARX-T)
December 20, 2017

In terms of who is the best in consistency and track record, it is probably this company. It’s not just natural gas price in a company like this. They have much more exposure to getting the oil price as well as the natural gas price. However, gas is so low he had hoped he could get these things at a decent valuation. Because the company has done so well, it still has a premium valuation. He thinks he has a more consistent story out of Cenovus (CVE-T). (See Top Picks.)

COMMENT
COMMENT
December 15, 2017

This has just fallen apart with ECO prices, with Henry hub falling. The markets have been so good that portfolio managers are just taking losers and dumping them as tax loss selling targets. Thinks there will be a pop between now and the 3rd week of January. The bad news is that the dividend has a 142% effective payout ratio, so it is not safe. The balance sheet is not ironclad.

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Arc Resources Ltd (ARX-T)
December 15, 2017

This has just fallen apart with ECO prices, with Henry hub falling. The markets have been so good that portfolio managers are just taking losers and dumping them as tax loss selling targets. Thinks there will be a pop between now and the 3rd week of January. The bad news is that the dividend has a 142% effective payout ratio, so it is not safe. The balance sheet is not ironclad.

PAST TOP PICK
PAST TOP PICK
November 22, 2017

(A Top Pick Dec 28/16. Down 30%.) In hindsight, this had been a mistake. The company has an excellent balance sheet, great management, is mostly natural gas in the Montney area. He was optimistic on the price of natural gas. His mistake was buying a Canadian natural gas stock rather than a US natural gas stock. The Henry hub price for natural gas has gone up significantly since last year. Unfortunately, most of the Canadian natural gas does not get priced at Henry hub, they get AECO which is priced off of Alberta, and that price has collapsed.

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Arc Resources Ltd (ARX-T)
November 22, 2017

(A Top Pick Dec 28/16. Down 30%.) In hindsight, this had been a mistake. The company has an excellent balance sheet, great management, is mostly natural gas in the Montney area. He was optimistic on the price of natural gas. His mistake was buying a Canadian natural gas stock rather than a US natural gas stock. The Henry hub price for natural gas has gone up significantly since last year. Unfortunately, most of the Canadian natural gas does not get priced at Henry hub, they get AECO which is priced off of Alberta, and that price has collapsed.

COMMENT
COMMENT
November 16, 2017

A well run company. The problem with this and a lot of the Western Canadian E&P’s is that the biggest part of production is natural gas coming out of Western Canada. At times in September, that production was basically worthless. The oil and condensates they are producing is worth quite a bit of money, but gas is almost being given away. The Western Canadian gas market continues to be depressed, and will be for a number of years.

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Arc Resources Ltd (ARX-T)
November 16, 2017

A well run company. The problem with this and a lot of the Western Canadian E&P’s is that the biggest part of production is natural gas coming out of Western Canada. At times in September, that production was basically worthless. The oil and condensates they are producing is worth quite a bit of money, but gas is almost being given away. The Western Canadian gas market continues to be depressed, and will be for a number of years.

HOLD
HOLD
November 6, 2017

Natural Gas. He does not have big exposure to the natural gas space. He thinks it will be an increasingly important way going forward to replace coal. There are huge, huge supplies. It will probably range trade for years. He does not see a huge upside. He would hold now but if over the winter we get a cold spell and it shoots up gas prices, then it would be a time to liquidate. Oil will trade at a discount to the North American market due to a lack of pipeline capacity.

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Arc Resources Ltd (ARX-T)
November 6, 2017

Natural Gas. He does not have big exposure to the natural gas space. He thinks it will be an increasingly important way going forward to replace coal. There are huge, huge supplies. It will probably range trade for years. He does not see a huge upside. He would hold now but if over the winter we get a cold spell and it shoots up gas prices, then it would be a time to liquidate. Oil will trade at a discount to the North American market due to a lack of pipeline capacity.

COMMENT
COMMENT
November 3, 2017

Thinks LNG terminals ultimately get built in Western Canada, but not very excited about natural gas prices in the near term. This company is good and its balance sheet is good for 2018. Further into 2019, the balance sheet deteriorates with natural gas prices being where they are. Not cheap relative to its peers, trading at around 9X, whereas its peers are trading at around 7X. Doesn't see a whole lot of growth. Nice dividend, but is at a 165% payout ratio.

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Arc Resources Ltd (ARX-T)
November 3, 2017

Thinks LNG terminals ultimately get built in Western Canada, but not very excited about natural gas prices in the near term. This company is good and its balance sheet is good for 2018. Further into 2019, the balance sheet deteriorates with natural gas prices being where they are. Not cheap relative to its peers, trading at around 9X, whereas its peers are trading at around 7X. Doesn't see a whole lot of growth. Nice dividend, but is at a 165% payout ratio.

COMMENT
COMMENT
October 31, 2017

This is known as a gas stock, but is fairly balanced with 60% gas and 40% oil. They have a great play in British Columbia, one of the higher-quality gas formations. Good management. You've seen a $10 pull back in the share price, similar to other gas stocks. Pays a nice dividend. It will have its time again. You just have to wait for colder weather and the supply/demand balance.

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Arc Resources Ltd (ARX-T)
October 31, 2017

This is known as a gas stock, but is fairly balanced with 60% gas and 40% oil. They have a great play in British Columbia, one of the higher-quality gas formations. Good management. You've seen a $10 pull back in the share price, similar to other gas stocks. Pays a nice dividend. It will have its time again. You just have to wait for colder weather and the supply/demand balance.

PAST TOP PICK
PAST TOP PICK
October 25, 2017

(A Top Pick Dec 21/16. Down 31.7%) A lot of the gas related stocks have been hit hard recently. The key in the gas and oil sector is to buy stocks that are well financed that can take advantage of opportunities on the market. He thinks we will see better results in the future and in the meantime you get a 3% dividend.

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Arc Resources Ltd (ARX-T)
October 25, 2017

(A Top Pick Dec 21/16. Down 31.7%) A lot of the gas related stocks have been hit hard recently. The key in the gas and oil sector is to buy stocks that are well financed that can take advantage of opportunities on the market. He thinks we will see better results in the future and in the meantime you get a 3% dividend.

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