Q: hi, can I get your latest thoughts on Parex please? do you think this is a buy, sell or hold?
5i Research Answer:
PXT has staged a small recovery, up 30% YTD now. It remains very cheap at 8X earnings, with an 8.13% dividend. The balance sheet remains strong, with $75M net cash. Financials are still lower than they were several years ago, but consensus calls for growth to resume next year. The Q2 numbers were solid, with good control on costs and favourable differentials. Guidance was maintained at 43,000 to 47,000 B/d. All in, its valuation and dividend make it attractive, with offsets to its high volatility and cyclicality. But it is buyable at current levels and momentum has improved.