IDK about them. They trade at a high PE of 23 and only a decent dividend at 3.2%. The other thing about them is I think they do all their own processing so they get full price for their crude production as they produce endproducts for the consumers. This is different than other companies that don't do upgrading or refining whose stock position will strengthen over time as more pipelines are built (and they will get built). They also won't stand to benefit by the expected increase in natural gas prices down the road once there is more usage in utilities and transportation and finally LNG exports once pipelines and LNG export terminal built.
So while they trade for an okay value right now any appreciation will depend on higher oil prices or increased oil production. This is different than other Canadian producers whose prices will improve as profitability increases with pipeline infrastructure and natural gas pricing. For these reasons I like CNQ best among Canadian majors.
They also won't stand to benefit by the expected increase in natural gas prices down the road once there is more usage in utilities and transportation and finally LNG exports once pipelines and LNG export terminal built.
question #1 ... what do u mean by increase in gas prices? what strip are u talking about?
reply to ur opinion of lack of exposure to natural gas is in the link below
Down 2.94% to $28.77/share .........nearing their 52 week low ($28.32) .........well below their 50 day MA ($29.70) and their 200 day MA ($30.39) ................increase in dividends each year since 2009 ........next dividend payout will be an increased amount of $0.2662 (formerly $0.242) ............anyone taking interest?
I sold Cenovus yesterday at $29.63 and eeked out a very tiny capital gain. I didn't have a whole lot invested in this company in the first place and wasn't one of my highest conviction buys, so it was a sigh of relief not to be part of today's dip.
The problem I have with Cenovus is that it's supposed to be the lowest cost operator. Yet, it's been two or three quarters in a row where its expenditures from its projects came in over expected. In addition, this company has lagged its competitors, while the oil prices have increased. All that being said, I think the current price is very attractive for someone investing for the long-term. It has a growing dividend and one of the higher yields in the integrated oil company space. CVE has attractive assets; it just has to deliver operationally.
The story looks pretty good to me. Lots of profit last quarter, $1.10 in cash flow per share, and Leeder, this quarter they had good control on operating costs. As Killer mentioned a bump in the divvy to boot. I can't help myself, I've got to buy some!
The Christina Lake operating costs were fine. It was the operating cost at Foster Creek that increased, and CVE also increased its 2014 operating cost guidance with this project.
If the stock price drops further, I may look into it again. I'll definitely keep it on my watch list!
I doubt it's a problem in the long-term. Everything resolves one way or another in the long-term.
In the short-term, until they resolve the issue with Foster Creek and continue to keep operational costs low with their projects, this stock will trade at this range. You can probably buy now, but you'll have to stomach the volatility in the short-term because I don't think it'll go anywhere. Also, I'm not good at reading technical indicators, but this stock is trading below 50 and 200-day moving average, and the trend is negative. Doesn't give me the warmest feelings in the world. On the bright side, the dividend is secure and you get paid while you wait.
Hmm, did some more digging. Foster Lake does seem to be a pretty big thorn in their side. These things have a way of hanging around and dragging things down, viz Cameco's Cigar Lake and Barrick's Pascua-Lama. I may wait to pull the trigger. Thanks for pointing that out Leeder, I let my enthusiasm get the better of my usual hard nosed cynicism about earnings reports.
I have heard rumors they are working on a helicopter supported drilling program which will essentially allow them to have a longer drill season, no need for roads.
CVE getting slaughtered today. Looking very attractive for a low cost integrated producer. Yield is now over 5%, will be interesting to see if they will slash it.
I think people need to be patient before buying any energy stocks, in general. There's a lot of blood on the streets, and there isn't any end in sight. I would rather wait until I see a slight recovery in the prices and some positive news before jumping in. Even if it means missing out on the initial 10% gain. Otherwise, we may be catching a falling knife if WTI price does drop to $40.
I think people need to be patient before buying any energy stocks, in general . There's a lot of blood on the streets, and there isn't any end in sight. I would rather wait until I see a slight recovery in the prices and some positive news before jumping in. Even if it means missing out on the initial 10% gain. Otherwise, we may be catching a falling knife if WTI price does drop to $40.
I agree with this! So far holding out has put me in a good spot to be rewarded well. Who cares if I lose the first 10% if the stock is already down 30% YTD.
Agreed. I have plenty of exposure already from being too aggressive too soon. I'm waiting on the sidelines for now, but good to keep the discussion going.
What's the big downside to this one? The cost of production of oil is one of the lowest making it a safe play in a low oil price environment?
"Cenovus had an operating cost of just $10.40 per barrel at Christina Lake and $14.79 per barrel at Foster Creek in the third quarter, making it one of the most efficient operators in Canada. Oil prices will probably drift higher throughout 2015."
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