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Opinions Brian Madden
Parex Resources Inc.PXT.TOBUYNov 21, 2023
Brian MaddenStock price when the opinion was issued
As of Jun 19, 2026. Market Open.
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Buy on the dip. Price of crude oil commodity is out of company control, affecting share price. Getting spikey with Red Sea transportation disruption. Low cost, debt free. Returns most capital to shareholders. Share buybacks. Financially disciplined, quality assets.
Brian MaddenDoing the right things: modest growth, maximum free cashflow, pays a dividend, aggressively buying back stock. Would be a core holding if it weren't for the jurisdiction. Compelling value, trading below 3x with free cashflow yield 16%. There are better opportunities for capital appreciation.
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Premium contentWe again reiterate this Canadian based energy producer with core assets in Colombia. The company projects production to grow to 54-57,000 boed -- with analysts projecting a 25% boost in free cash flow. It trades at 4x earnings, 1.1x book and supports a 31% ROE. Cash reserves are growing, while stock is aggressively bought back and debt is reduced. We continue to recommend a stop at $24, looking to achieve $36 -- upside potential of 33%. Yield 5.2%
(Analysts’ price target is $36.02)
Frustrating. NAV is above $30/share, and shares lag this. Continues to like it though; they are doing the right things by growing cash flow. Margins are tremendous because the costs of producing oil in Colombia is low. Plus, they're getting better routes to market with pipelines. Are exposed to Brent Oil instead of WCS, so prices they get are better. They are buying 10% of outstanding shares each year, a big amount. Happy to hold.
Brian MaddenPremium contentBeing debt free and the largest independent oil and gas producer in Colombia, we reiterate PXT as a TOP PICK. The company has demonstrated over 15% annual growth in per-share production and reserves over the past five years. Cash reserves are growing, while shares are bought back. It trades at 5x earnings, 1.2x book and supports a 35% ROE. We continue to recommend a stop-loss at $24, looking to achieve $35 -- upside potential of 30%. Yield 3.1%
(Analysts’ price target is $34.91)Premium contentWe reiterate PXT, the Canadian-based largest independent energy producer in Colombia, as a TOP PICK. The company is on track to hit 55 Mboed production guidance for the year. It trades at 6x earnings, 1.3x book value and supports a ROE of 35%. Cash reserves are growing, while they aggressively buy back shares and retire debt. We recommend trailing up the stop (from $23) to $24, looking to achieve $35 -- upside potential of 25%. Yield 3.0%
(Analysts’ price target is $35.21)Low-cost operator in Colombia. Production growing at high-single digit pace. Political unrest behind them. Expects to meet guidance. Cash rich, no debt. Covertly taking the company private. Initiated dividend, special dividend. Cheap at 5x earnings. Likely to outperform in a less than robust commodity environment that we have now.
Brian MaddenPremium contentPXT is the largest independent energy producer in Colombia and we reiterate it as a TOP PICK. Recently reported earnings show per share reserves growing faster than production (both exceed 16% annually over the past five years). The company targets to return 100% of free cash flows to investors, while it continues to buy back shares. We recommend trailing up the stop (from $19) to $23, looking to achieve $34 -- upside potential of 25%. Yield 4.2%
(Analysts’ price target is $33.65)Premium contentThis TOP PICK is a Canadian based energy producer in Colombia that has successfully increased reserves for 12 consecutive years and increased production 11% over the year (81% oil vs 19% natural gas). It announced a 50% increase in dividends and is aggressively buying back shares. We recommend a stop-loss at $19, looking to achieve $35 — upside potential over 45%. Yield 2.4%
(Analysts’ price target is $35.13)A year ago, oil prices spiked sharply because of the Russian war. Also, a leftist government won the Colombia election so there was a fear of higher royalties paid. Still likes Parex: debt-free, pays nearly a 4% dividend and are buying back lots of shares.
Brian MaddenBrian MaddenBrian Madden
OPEC meetings are reactive, not pro-active. With all their data, for instance, they cut production if that data foretells weak demand. So, a cut is not a good thing. That said, he would buy quality oil stocks like Parex and Tourmaline.