As the broader commodities market continues to improve, investors searching for value certainly have a wide variety of options available to them on the TSX. From domestic opportunities to a range of multinational operators providing excellent value currently, companies operating in the oil & gas sector have all the making of strong fundamentals which should serve investors well in the years to come.
Parex Resources Inc. (TSX:PXT) is a company many investors have kept their eye on in recent months, as the oil producer has rebounded more than 25% from a 52-week low experienced at the end of the summer amid strength in the company’s production numbers as well as improving profitability measures of late reflected in the operating margins by Parex’s underlying business. Parex operates primarily in the Colombian market, providing North American investors with an interesting diversification option in the commodities sector with strong fundamentals and excellent long-term opportunities for growth.
Parex’s underlying balance sheet is strong, as evidenced by the company’s very low valuation of approximately 5x cash flow. With rising oil prices set to improve Parex’s free cash flow situation further, expectations that the company’s current low valuation will become even more attractive is one tailwind investors can expect to ride higher in the quarters and years to come. Geopolitical risks aside, Parex is an oil & gas company with much stronger fundamentals than the vast majority of its peers, making this an excellent pick for value-hungry investors today.
Invest Wisely, my friends.
