Joanne A. Hruska, CFA Cenovus Energy CVE-T HOLD Nov 14, 2018

One of his worst calls in 2024 backing this instead of SU. Downstream challenges continue. Negative EBITDA in a quarter matters. Sentiment is really bad toward these guys. Quality inventory. He sold for a tax loss, plans to come back when confident that downstream issues (refining, which is a low-margin business) are fixed.

Energy stocks are in a holding pattern, and this one is typical. Take a look at the 3-year chart. In a trading range, but looks to be cracking support and that's a danger. Technically, he'd be a bit concerned.

Likes the energy space, and this name is his play. Pipelines to the West Coast have opened up. 

Trades under 12x PE and are buying back lots of shares. Likes it. Options: sell the April $25 call and get 20 cents, not a big premium, but leaving lots upside to get closer to the upper-$20s. But he is not selling calls on CVE, because he expects the share price to recover. But at $27-28, he will sell at $30s. For new money, he will sell $20-22 puts.

She doesn't own any producers, and she owns PPL, so she likes that idea.

Q4 missed on downstream margins. Upstream projects are on schedule and on budget. Expects FCF to inflect meaningfully as spending drops and production starts to kick in. Sector faces headwinds, but this is a name you can go to. Way cheaper than peers. Nice production growth, cashflow growth, shareholder returns of 8%. Would be adversely hit by tariffs. All in, he'd be a buyer.

A value trap. The ultimate catalyst (fixing their downstream) keeps getting deferred and deferred. Share buybacks in recent months is sluggish. A very cheap stock, but downstream keeps biting them. He's cheering for them, but look at CNQ instead.

Coming into the time when you want to own energy, between mid-February and May/June. Chart shows it's at, or maybe below, support. He'd need to see a bounce to be bullish on it. Watch for another 2 weeks or so; if it breaks down, you have to get out.

Downstream operations have been extremely weak. Look at the dividend history. They've cut the dividend in the past, so not a stable dividend payer. Dividend looks high because stock price is low. Look elsewhere.

High exposure to price of oil and to the differential of Canadian heavy oil (back to almost-new lows). Upstream is going exceedingly well. But downstream has poor utilization rates, mishaps, negative EBITDA; those are all the reasons it's massively lagged peers. Fix that, and good rerate potential; won't play out until latter half of 2025 or early 2026.

If you own, he'd hesitate to sell. He's watching, near the top of his list to deploy capital. You could wake up one morning to a big pop in the stock price.