
TSE:SU
This summary was created by AI, based on 16 opinions in the last 12 months.
Suncor Energy Inc (SU) has garnered attention for its significant turnaround under the current management, which has streamlined operations and improved financial performance. Experts note that the company has strong prospects due to its profitable oilsands operations, which are expected to generate cash flow for many years, bolstering both income and growth potential. There is a prevailing optimism about its future, with predictions of substantial upside in stock value, even amidst concerns regarding recent CEO changes. However, there are suggestions to consolidate positions or reassess targets in light of fluctuating oil prices and market conditions, reflecting a cautious yet favorable view on the company's long-term trajectory.
He would compare it with Canadian Natural Resources which has a greater chance of upside. Suncor wasn't beaten down as much as CNR. They have good free cash flow and executes well. Energy stocks in general are still at risk since institutional money is avoiding the sector.
SU cut their dividend. It is a bellwether energy stock. Refining margins are tough which hurts SU. He owns CNQ instead; it didn't cut its dividend. SU stock is okay now with oil prices in the low-$40s, but could weaked in the fall. He's not adding his energy exposure. The bigger picture is: how much oil do you want in your portfolio. He owns CNQ and recommends that in the mid-$20s. Oil offers decent risk/reward given base demand, but wait till the fall to see if demand declines due to a COVID uptick. Oil depends on whether shale oil receives capital support and shale decline has been the game-changer in the last few months. Overall, SU is fine, but if you're switching into CNQ, now's the time to do it.
CSH.UN-T vs. SU-T. They seem to have nothing relating to one another. Both have had a difficult time. There is a logical answer to this. Falling interest rates are the single biggest supporter of real estate values. We are at or near generational lows in interest rates. If you saw reflation then commodity assets would start to participate. He would own SU-T or CNQ-T if he were to own something in energy. He owns SU-T. He would sell CHR.UN-T in order to buy SU-T.
One-year outlook Doesn't follow it. Doesn't like commodities, because these companies don't set their product's price. It doesn't matter how good management is. Also, Canada lacks enough pipelines. He prefers pipelines like Enbridge over the oil producers. He has no idea where oil is going.