In the energy space, most stocks have felt the pressure lower commodity prices have placed, with companies struggling to find previous levels of profitability as capital expenditures have ballooned in recent years and production levels have stagnated.
That being said, opportunities within this space still exists for investors who are willing to ride out what looks to be a medium-term commodity price dip.
Parex Resources Inc. (TSX:PXT) is one such opportunity in the Canadian energy space – while Parex is headquartered in Canada, the company’s operations are based in South America, offering investors unhedged exposure to international oil prices which are expected to rise over time.
Perhaps the biggest complaint most Canadian oil investors have with respect to operators in Alberta is the discount heavy Canadian crude gets relative to global WTI or Brent pricing – Parex is one Canadian play for investors looking to circumvent this discount.
The company’s revenue streams continue to increase at an impressive clip as the company drills more wells on its land (primarily in Colombia), and Parex has grown its bottom line faster than its top line through a number of productivity and profitability initiatives which have increased earnings four-fold in the most previous quarter (year over year).
In short, Parex offers investors a healthy mix of growth and profitability in a sector which leaves much to be desired, on the whole.
Invest wisely, my friends.
