New energy deal, new biotech interest and Old Golden Bears
Here are three things we thought You Should Know about today:
1. Big acquisition for Pine Cliff – On Monday of this week the Globe and Mail posted this article predicting a strong continuation of the current M&A activity in the energy patch. And, right on cue, the very next morning, a longtime Peterson Capital client Pine Cliff Energy (PNE $1.60 Mkt Cap $547 million) announced the acquisition of privately held Certus OIl & Gas. The market clearly likes this $100 million transaction, with PNE shares moving up 10% since the announcement. We’ll be putting together a summary of analyst comments over the next few days and send them out with next week’s YSK.
Pine Cliff is one of the core holdings across our network in both Canada and Europe. We started working with CEO Phil Hodge and his team in the fall of 2020 and early 2021. As you can see, anyone who began taking a position at that time has been handsomely rewarded. Today it’s clearly a leading player in the natural gas sector, with one of the lowest decline rates and highest free cash flow profiles, as well as paying a monthly dividend with a current yield of 8.4%.
2. Bigger biotech interest in the UK – our London-based VP, Peter Cowan, sent me a note this morning saying he’s seeing strong interest in the biotech sector in the UK at this time. That’s truly good news for Canadian biotech companies, since the reception here at home is clearly not as robust.
Here’s the key part of Peter’s message:
“I’m hearing from my colleagues here in London that there seem to be four key drivers that explain this interest in biotech:
The pandemic has clearly brought new awareness and capital to the table for strong biotech companies.
If you add that to the bigger demographic picture due to a growing and aging population, the interest in seeing breakthrough drugs and medical treatments coming to the market is very high.
The NASDAQ biotech index consistently outperforming the MSCI World Index over the past decade hasn’t escaped notice of investors in that sector
The nature of biotech innovation leads to acquisitions “
So, you can see why we’re getting lots of calls from strong biotech stories - like Sernova Corp, who will be in Geneva, Zurich and London later this month – interested in coming over to Europe with us.
3. Old Golden Bears – Last week I was so very, very happy to reconnect here in Edmonton with a number of my former teammates from the 1974-75 U of A Golden Bears University Cup national hockey championship team. Lots of laughs and lots of fun, especially when some of the old pics come out, like the one below on the left, taken right after we’d won the championship. See if you can find me – hint: big blue blow tie. 😊
The reason for the get-together was wonderful: Dale Henwood, our #1 goalie on the team, was recently honoured by the University of Alberta with an induction to the Sports Wall of Fame. You can read all about Dale’s amazing contribution to hockey in Canada: Dale Henwood (2023) - Sports Wall of Fame - University of Alberta (bearsandpandas.ca).
Dale is second from the left on the top row of the hockey team pic, and standing third from the right in the second pic, taken just prior to the ceremony with a gathering of a group of us from the team.
Time flies, right? As they say, the days are long but the years are short. No kidding.
Thank you for your continued interest and support.
Rick Peterson (He/him)
Chair