The Financial Post reports in its Friday edition James Hodgins, chief investment officer of CHS Asset Management, says buy Parex Resources ($9.92). The Post's Jonathan Ratner, writing in Buy & Sell, says Mr. Hodgins's long positions in the energy space are limited to extremely low-cost producers, most of which do not operate in Canada. He runs the Curvature Market Neutral Fund for Arrow Capital Management, which is run in sync with the Curvature Fund LP for institutional clients. Both take equal weightings in terms of long and short positions, along with a risk overlay to reweight positions to ensure the portfolio is market neutral in terms of sector and liquidity. Mr. Hodgins continues to think the equity market is incredibly expensive and, for the most part, so are other risk assets, in part because interest rates are being kept low and partly because quantitative-easing efforts are flooding the market with liquidity. One of the downsides of that kind of environment is that projects that are not economic at reasonable levels of capital costs get built. This, says Mr. Hodgins, results in a misallocation of capital, and figures what happened in the energy sector as an example of this misallocation.