Traditionally, risk averse investors wish to minimize the firm specific risk associated with the given expected return of their portfolio by adding new assets with low correlations (Correlation describes the degree to which returns on investments move together), a process called Diversification.
Today, we have shortlisted 13 Canadian energy stocks with low correlations (<0.4) against TSX index, which offer diversification benefits to a portfolio and which are also expected to report high ROE estimates (>12%) for fiscal year 2014. Moreover, during the past one month, some of these stocks have registered price gains with daily average trading volumes in excess of 100,000.
| Company Name |
Ticker |
Exchange |
Market Cap |
Last Price |
Average Volume |
Price Change (1-Month) |
Correlation Coefficient |
ROE 2014(E) |
|
High Arctic Energy Services Inc |
HWO |
TSX |
232.0 |
4.16 |
134,253 |
-0.5% |
0.17 |
21.0% |
|
Perpetual Energy Inc |
PMT |
TSX |
216.0 |
1.44 |
282,252 |
2.1% |
0.23 |
15.9% |
|
Pason Systems Inc |
PSI |
TSX |
2,121.2 |
25.59 |
305,424 |
-12.2% |
0.24 |
31.3% |
|
PHX Energy Services Corp |
PHX |
TSX |
396.5 |
11.29 |
113,448 |
-8.4% |
0.26 |
15.5% |
|
Bellatrix Exploration Ltd |
BXE |
TSX |
1,003.4 |
5.24 |
3,653,076 |
-12.7% |
0.31 |
12.8% |
|
Canacol Energy Ltd |
CNE |
TSX |
425.9 |
3.95 |
1,963,910 |
2.6% |
0.31 |
18.8% |
|
Pacific Rubiales Energy Corp |
PRE |
TSX |
4,544.7 |
14.40 |
4,097,159 |
-7.9% |
0.34 |
13.2% |
|
ShawCor Ltd |
SCL |
TSX |
3,245.1 |
50.32 |
329,564 |
-0.2% |
0.35 |
19.4% |
|
Trilogy Energy Corp |
TET |
TSX |
1,826.4 |
13.95 |
1,083,580 |
-38.7% |
0.35 |
13.0% |
|
Petrowest Corp |
PRW |
TSX |
169.9 |
0.96 |
715,268 |
3.2% |
0.36 |
16.6% |
|
Birchcliff Energy Ltd |
BIR |
TSX |
1,495.7 |
9.83 |
1,484,654 |
4.6% |
0.36 |
12.1% |
|
Bankers Petroleum Ltd |
BNK |
TSX |
1,151.2 |
4.41 |
3,991,879 |
-0.2% |
0.37 |
14.9% |
|
Canyon Services Group Inc |
FRC |
TSX |
777.9 |
11.34 |
977,824 |
2.5% |
0.37 |
14.3% |
Source: Bloomberg
Company Description
High Arctic Energy Services Inc (TSX: HWO)
High Arctic Energy Services Inc. (T.HWO) offers oilfield services. The company offers underbalanced drilling and production services, equipment, design and development services, and technical support and training.
Perpetual Energy Inc (TSX: PMT)
Perpetual Energy Inc. (T.PMT) is an independent natural gas producer. The company owns, operates, and develops oil and gas properties throughout Canada.
Pason Systems Inc (TSX: PSI)
Pason Systems Inc. (T.PSI) provides rental oilfield instrumentation systems that are designed and manufactured for use on land-based drilling and service rigs. The company offers both wellsite rental services and Internet data management services.
PHX Energy Services Corp (TSX: PHX)
PHX Energy Services Corp. (T.PHX) provides a wide range of horizontal and directional drilling technology and services. The company operates in North America, Peru, Albania, and Russia. PHX designs and manufactures a wide range of downhole technologies.
Bellatrix Exploration Ltd (TSX: BXE)
Bellatrix Exploration Ltd. (T.BXE) explores for oil and natural gas.
Canacol Energy Ltd (TSX: CNE)
Canacol Energy Limited (T.CNE) is an international junior energy company with production and exploration operations located in South America. The company’s operations are focused in Colombia, Brazil, and Guyana.
Pacific Rubiales Energy Corp (TSX: PRE)
Pacific Rubiales Energy Corporation (T.PRE) focuses on the exploration, development and production of heavy crude oil, light and medium oil, and gas in Colombia. The company also has exploration blocks in Peru.
ShawCor Ltd (TSX: SCL)
ShawCor Ltd. (T.SCL) is an energy services company focusing on technology-based products and services. The company serves exploration and production, pipeline, petrochemical, and industrial markets around the world. ShawCor operates through its partial interest in Bredero-Shaw, and through its OMSCO, Guardian, Shaw Pipeline Services, Canusa-CPA, DSG-Canusa, and ShawFlex business units.
Trilogy Energy Corp (TSX: TET)
Trilogy Energy Corp. (T.TET) is a petroleum and natural gas-focused Canadian energy corporation. The company acquires, develops, produces and sells natural gas, crude oil and natural gas liquids.
Petrowest Corp (TSX: PRW)
Petrowest Corp. (T.PRW) is an oilfield services company. The company provides pre-drilling and post completion services to the northern region of the Western Canadian Sedimentary Basin.
Birchcliff Energy Ltd (TSX: BIR)
Birchcliff Energy Ltd. (T.BIR) evaluates acquisition opportunities for light oil and natural gas with a view to purchasing assets. The company is seeking to explore and develop oil and gas in Western Canada.
Bankers Petroleum Ltd (TSX: BNK)
Bankers Petroleum Ltd. (T.BNK) is an oil and gas exploration and production company. The company has a working interest in the Patos-Marinza oil field in Albania.
Canyon Services Group Inc (TSX: FRC)
Canyon Services Group, Inc. (T.FRC) offers oil field services. The company offers fracturing and chemical stimulation services to enhance oil and natural gas production.
