BNN Bloomberg: Cam Scrivens on the value of barriers to competition
For investors looking at the long term, companies operating in industries with strong demand and significant barriers to new competition can offer compelling opportunities.
In a recent appearance on BNN Bloomberg, Cameron Scrivens, President and Portfolio Manager at JCIC Asset Management, highlighted two companies that fit this investment philosophy: Valero Energy (NYSE: VLO) and Freeport-McMoRan (NYSE: FCX).
Valero operates in the oil refining sector, where regulatory hurdles and the difficulty of bringing new facilities online constrain capacity. With some international refining operations disrupted by conflict, existing operators like Valero are well positioned to benefit from continued demand.
Freeport-McMoRan offers a similar opportunity in copper mining. Copper remains in tight supply, while obtaining approvals for new mines is increasingly difficult. Freeport is also making progress reopening its Grasberg mine in Indonesia and expanding its molybdenum production, providing additional diversification.
For Scrivens, the appeal of both companies extends beyond near-term commodity prices. Regulatory barriers limit new supply, while sustained demand supports their long-term prospects.
Geographic and political stability are also important considerations.
“If you're able to dig or drill in an area that has stability, then I think you get a lot more value accrued to your stock,” Scrivens explained.
Together, these factors make Valero and Freeport attractive long-term investment opportunities that JCIC has incorporated into their investment funds.
Watch the full interview here:
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