- News and analysis
- Undervalued Value Stocks: Suncor Energy
Undervalued Value Stocks: Suncor Energy
Suncor Energy is a Canadian energy company that specialises in production of synthetic crude from oil sands. Its stocks are trading around the same level as a decade ago. The reason for this is a lack of investors’ satisfaction as the firm delivers low incomes. Operational income was down by 29% as EPS tumbled to $1.36, and the Free Cash Flow was down by 21% to $2.26 per share.
It is worth remembering that energy companies are cyclical, and the sector is now recovering. Most of the companies from the sector have rewarded their shareholders, including Suncor. It spent $874 million for buy back of its shares and $690 million on dividends during the last quarter.
The management is planning to spent $5.8 billion on Capex and acquisition of TotalEnergies SE Canadian-based assets. This acquisition is very promising as Suncor will increase its oil sands reserves by 10% immediately after the deal is closed. This deal is largely financed by borrowed funds, which is the only risk factor. However, the company is planning to pay off $9 billion of its $15.7 billion debts by the end of 2024. It is also planning to spend half of its FCF on buy backs, and increase this buy backs to 75% of FCF in 2025.
Investors that are prepared to act against the market by adding SU stocks to their portfolios with a huge discount could be largely rewarded when the market sentiment changes.
The comments, insights, and reviews posted in this section are solely the opinions and perspectives of authors and do not represent the views or endorsements of RHC Investments or its administrators, except if explicitly indicated. RHC Investments provides a platform for users to share their thoughts on financial market news, investing strategies, and related topics. However, we do not guarantee the accuracy, completeness, or reliability of any user-generated content.
Investment Risks and Advice:
Please be aware that all investment decisions involve risks, and the information shared on metadoro.com should not be considered as financial advice. Always conduct thorough research, seek professional advice, and exercise caution when making investment decisions.
Moderation and Monitoring:
While we strive to maintain a respectful and informative environment, we cannot endorse or verify the accuracy of all user-generated content. We reserve the right to moderate, edit, or remove any comments or posts that violate our community guidelines, infringe on intellectual property rights, or contain harmful content.
By submitting content to metadoro.com, users grant RHC Investments a non-exclusive, royalty-free license to use, display, and distribute the content. Users are responsible for ensuring they have the necessary rights to share the content they post.
To maintain a positive and respectful community, users are expected to adhere to the community guidelines of Metadoro. Any content that is misleading, offensive, or violates applicable laws and regulations will be subject to moderation or removal.
Changes to Disclaimer:
We reserve the right to update, modify, or amend this disclaimer at any time. Users are encouraged to review this disclaimer periodically to stay informed about any changes.