Q: Can you please provide thoughts on ATH Athabasca oil? I purchased the stock earlier this year taking advantage of the dips in prices of oil stocks that seemed unjustified at the time.
I initiated this particlar name at 0.6% of the portfolio and it's now grown to be 1.2% of the portfolio. I have other oil and gas stocks TOU, ARX, CGE, and TVE. I'm not in a rush to sell ATH and the chart looks like it pretty much has free-air above it to go a lot higher... very little by way of chart resistance.
How do you look at the company given current circumstances? Add to it? Hold it? Trim it to not give away winnings?
Thanks!
I initiated this particlar name at 0.6% of the portfolio and it's now grown to be 1.2% of the portfolio. I have other oil and gas stocks TOU, ARX, CGE, and TVE. I'm not in a rush to sell ATH and the chart looks like it pretty much has free-air above it to go a lot higher... very little by way of chart resistance.
How do you look at the company given current circumstances? Add to it? Hold it? Trim it to not give away winnings?
Thanks!
5i Research Answer:
ATH is doing many things right, and its balance sheet is rapidly improving with cash flow. We like its forecasted growth, free cash flow and momentum. It is more expensive than most in the sector, but has good leverage to oil and market cap is now in a range where more investors can get interested. We certainly like to let strong momentum run, especially in a sector that is also recovering nicely from a dip early in 2023. We cannot comment on personal weightings, but WE would be quite comfortable in the 2.5% range on this stock.