Penn West Petroleum is engaged in the business of acquiring, exploring, developing, exploiting and holding interests in petroleum and natural gas properties and related assets. Penn West participates in the exploration for, and the development and production of, oil and natural gas principally in western Canada.
Although the past year hasn’t been very profitable for investors, the past two months have seen a 23% growth in share price. At the same time, this company isn’t very popular based on fundamentals. The debt is too high for many analysts, and the company recently made board-level changes, as well as replacing the CEO and much of the technical team. Basically, it’s not the same company as it was a few months ago, with the exception of their vast resource reserves.
What Penn West has in its favour is the fact that the share price continues to advance, unlike most of the rest of the TSX 60. Very few companies were able to say that last week. This may not be the most attractive, but it has a positive outlook for the short-term.
Other companies to consider may include MG, VRX, L and MFC. Manulife Financial is more popular with analysts, given its clear and positive financial reporting. They are well positioned to benefit from rising interest rates, and they would also be helped by rising equity markets (if we ever see those). I’ll likely look closer at Manulife next week.