Who said ‘buy and hold’ is dead? SmallCapPower.com takes a look at some Canadian companies that have rewarded patient investors that have held its shares over the past decade. Examining what has made these companies successful will hopefully help one find the next big winning stock for their portfolio.
Pacific Rubiales Energy Corp. (TSX: PRE): 5,314.7% share price surge
A decade ago, AGX Resources Corp. (now Pacific Rubiales) was searching for diamonds in Brazil. In 2007, the sleepy explorer received a ‘jolt’ of energy by acquiring Major International Oil S.A, Rubiales Holdings Limited, as well as merging with Pacific Stratus Energy Ltd. (in a $648.9 million, all-stock transaction).
Billionaire financier Frank Giustra had seeded Pacific Stratus Energy with $5.0 million in early-stage funding. The combined entity would eventually be known as Pacific Rubiales Energy, and become Colombia’s largest non-state owned oil and gas firm.
From 2007 onward Pacific Rubiales boasted a 91% Compound Annual Growth Rate (CAGR) in its cash flow, which has allowed it to grow internally without excessive shareholder dilution. The company also had a net production CAGR of 59% during the same time period, generating operating margins of 60% plus.
Pacific Rubiales’ funds flow from operations increased 38% to US$1.9 billion in 2013. Last year, the company also made new discoveries in Colombia, Peru, and Brazil.
Production from the Rubiales field alone in the first quarter of 2014 was 192 Mbbl/d total grossfield (65 Mbbl/d net) with 4.6 billion barrels of Oil in Place. Meanwhile, the company’s total funds flow from operations in Q1 was $474 million.
Pacific Rubiales has consistently paid and increased its dividend since 2010, with the stock currently yielding about 3.3% annually. The company has also bought back more than 11 million of its common shares since December 2013.
PRE’s stock price has been lifted recently by a Bloomberg report that Mexican auto parts and petrochemical company Alfa SAB has increased its stake in Pacific Rubiales more than 20 times in just over two months. It also mentioned the possibility of a management buyout.
Pacific Rubiales has about 315 million fully-diluted shares outstanding and its stock is listed on the Toronto, Colombian, and Brazilian stock exchanges.
Read more top performing Canadian stock articles:
http://www.smallcappower.com/posts/article-top-performing-canadian-stocks-over-10-years-8-8-2014
http://www.smallcappower.com/posts/article-top-performing-canadian-stocks-over-10-years-1-8-2014
http://www.smallcappower.com/posts/article-top-performing-canadian-stocks-over-10-years-25-7-2014
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