# Cenovus Energy Inc. (CVE.TO)



## blin10

this one looks pretty good right now, anyone buying?


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## Hawkdog

i would have if I had the funds available. Anytime CVE dips below 30 bucks is a good buy IMO.


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## blin10

picked up some at 29.5, let's see how this will play out...


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## PMREdmonton

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.


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## thenegotiator

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

http://www.cenovus.com/operations/natural-gas.html


even though they spun off from ECA .
they do produce quite a bit of NG.
pitch in by all means.
as for price entry i have ... yet again no opinion.


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## Spidey

I sold out earlier in the year at, I believe, $34.60. I wouldn't mind buying it back at the right price. I'll wait to see what happens in the summer.


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## Hawkdog

From my experience with them, they have an excellent management team and are an extremely innovative company.



PMREdmonton said:


> 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.


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## Hawkdog

earnings out.

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:CVE-2061431&symbol=CVE&region=C


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## Justin1980

Old thread. Just curious what folks are saying now under $27.00?

Edit: Nvm... Seems RBC hasn't updated in 3 days, and it's nearing $30.


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## Uranium101

Anyone read their annual reports?


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## Killer Z

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?


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## leeder

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.


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## underemployedactor

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!


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## leeder

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!


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## underemployedactor

I just saw the average of $13.02 bbl, but didn't see the operational breakdown. Do you think Foster Creek is a potential problem down the line?


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## leeder

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.


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## underemployedactor

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.


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## pastorash

Anyone in the know have any up to date info. on them?


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## Hawkdog

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.


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## underemployedactor

Approval for the Grand Rapids project is very good news; something like 1.5 billion barrels of probable reserves.


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## Hawkdog

Nice jump this week!

https://www.youtube.com/watch?v=6q4LVEB9FP8


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## GOB

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.


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## Fraser19

Yup, very attractive.
It's been a crazy ride. In the last 5 days,
CVE -14%
IMO -8%
BTE -17%
SU -9%
HSE -9%
COS -16%

Most stocks are well below what I had for a purchase price in mind, but they are still sinking.


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## pastorash

I averaged down on my Cenovus yesterday, still sinking today. 

What a ride!


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## leeder

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.


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## Fraser19

leeder said:


> 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.


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## GOB

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.


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## Chris L

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."

http://www.fool.ca/2014/12/30/3-big-reasons-to-own-cenovus-energy-inc-in-2015/


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## AltaRed

Those cash numbers are way too low. You have to look at a lot more than operating expense. Items such as transportation (to get cash price at property gate from Edmonton based selling prices), royalties, current taxes (not deferred taxes), interest expense (on debt), G&A and ???. As said in another thread, go to the financials and calculate it for yourself. The wild card in the calculation is royalties and current taxes, both of which are variable depending on netback (margin).


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## Getafix

Any reasons why CVE is taking such a beating the last 5 days compared to HSE, SU, CNQ? Is it because of the share offering? Down by almost 11.81% and getting near the december 2014 lows.


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## al42

CALGARY, ALBERTA--(Marketwired - Feb. 17, 2015) - Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) ("Cenovus") announced today that it has entered into a bought-deal financing agreement to sell 67.5 million common shares ("Common Shares") at a price of $22.25 per share (the "Offering"). The net proceeds of the Offering, combined with the company's $3 billion of undrawn committed credit lines, provide Cenovus with a stronger balance sheet and financial flexibility to pursue its planned capital program.

The Offering will be made through a syndicate of underwriters (the "Underwriters") led by RBC Capital Markets and TD Securities Inc. The gross proceeds from the Offering are expected to be about $1.5 billion. The Offering is subject to customary closing conditions, including receipt of applicable regulatory and stock exchange approvals, and is expected to close on or about March 3, 2015.

Read more at http://www.stockhouse.com/news/pres...al-common-share-financing#UGf1GmpZQQz7iizg.99


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## 1980z28

Have a buy at 22.00 for 909 shares

will see what happens


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## Chris L

1980z28 said:


> Have a buy at 22.00 for 909 shares
> 
> will see what happens


How do you have so much money to make so many high dollar trades??


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## 1980z28

Chris L said:


> How do you have so much money to make so many high dollar trades??


I am old plus I leverage


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## Chris L

So what do you expect to happen with this one? I liked it before...

Do you expect it to rebound 5% then sell? Oil down today, if oil goes up tomorrow, looks like 2-3% rebound to me. You?


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## 1980z28

I hope for a return of 50k to ???

For each year,last year 54k

This year up 31k


Have two houses paid for and LOC at .1% under prime of 450k that I use,it is at 7k at this moment 

I have large holdings in some stocks and play with others,my largest is fts at 3700 shares


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## Chris L

Did you get your $22? Looks stuck at 22.10.


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## 1980z28




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## daddybigbucks

I think this is a crazy deal. People who don't own CVE are happy to get in, but long time shareholders are not happy.
I got out last year and this move proves I don't agree with management. 
Even if they are one of the lowest cost per barrel oil sand company.


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## 1980z28

I will not buy anymore RIM (BB)

But oil will go up and down

Sold my COS,but CVE is ok with me at 22 and change


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## Getafix

1980, 

Sorry for the stupid question, but are you buying these (short term trades) in your taxable accounts?


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## 1980z28

yes

working with a large account

account is over 30 years old


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## Getafix

Ok thanks, i'm out of TFSA room but i think i'm taking a bite as well. Let's see how it goes!


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## thepitchedlink

I jumped in as well.....it is a crazy deal......still waiting to see if I got it at 22.12


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## thepitchedlink

well, look at that. down 10$ already.....:biggrin:


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## Getafix

In at 22.10!


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## KaeJS

In for 500 @ 22.10.


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## KaeJS

Getafix said:


> In at 22.10!


Nice! :biggrin:


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## blin10

redirected some HSE profits into more CVE today, now time for patience


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## KaeJS

A little disappointing today. Down 2.3%

I guess the ex-div date was today, or yesterday, I'm not sure. Either way, still a bit disappointing. I had higher hopes for this one. I thought we would see $23 relatively soon as a "bounce" back from the bought deal news.

I'm in for 1000 at 21.95.

If it keeps going lower I think I may just purchase another 500. It seems to be relatively flat, so I may be able to do a quick trade or two on 500 shares while keeping my original position of 1000 shares. They are yielding 5% now and I don't think a dividend cut is in the books.

It looks to me like the stock wants to go higher, but there is the oil uncertainty so it's just staying flat instead. Not going down, but not really moving upwards, either.


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## pastorash

I originally purchased at $29.45 early last year then bought down at $22.45 in December. I'm guessing I'll have to be really patient with this one but trusting the value will do well over time. Meanwhile, as has been noted, the dividend looks relatively secure.


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## KaeJS

I think you'll be fine. I've got some high hopes for this one as I have said previously. I am watching this one everyday. It doesn't usually follow the other oil companies. It has lots of buying activity and a low number of willing sellers.


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## KaeJS

Yikes!

Am I the only one that thinks today was a bit oversold?

I mean... 5%? Really?


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## Homerhomer

KaeJS said:


> Yikes!
> 
> Am I the only one that thinks today was a bit oversold?
> 
> I mean... 5%? Really?


Why are you surprised KaeJ? those stock bounce like a yoyo. I am waiting for December low before I get into this one.


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## KaeJS

I expected a 2, maybe 2.5% decline.
I just thought 5%+ was a bit much.

Might start writing some April calls on this one.


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## GOB

Surprised about an oil stock dropping 5%? Welcome to 9 months ago.


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## KaeJS

GOB said:


> Surprised about an oil stock dropping 5%? Welcome to 9 months ago.


Most of the competition didn't drop over 5% today. With the exception of maybe COS, at 4.5%.


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## gladaki

5 year Avg Return on CVE

Cenovus	

Year1 30
Year2 6
Year3 -7
Year4 -7
year5 -17

5 year Avg return is only 0.82%

if we consider dividend and compounding. Assuming you bought it for 24.71 in 2009 and sold it after5 year at 23.3,total dividends are 4.11..
Avg return will be 2.09%

In both cases not very impressive.


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## gladaki

gladaki said:


> 5 year Avg Return on CVE
> 
> Cenovus
> 
> Year1 30
> Year2 6
> Year3 -7
> Year4 -7
> year5 -17
> 
> 5 year Avg return is only 0.82%
> 
> if we consider dividend and compounding. Assuming you bought it for 24.71 in 2009 and sold it after5 year at 23.3,total dividends are 4.11..
> Avg return will be 2.09%
> 
> In both cases not very impressive.











Suncor vs CVE
Interesting they follow the same trend till 2013 infact SU was low after that SU just went up..
May be I am looking at something wrong


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## KaeJS

Yesterday I wrote 10 Covered Calls for April 17 Expiry.
$22 Strike. $0.33 Premium.

I actually don't want this to be over $22, though. LOL. But I don't mind either way...


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## Squash500

KaeJS said:


> Yesterday I wrote 10 Covered Calls for April 17 Expiry.
> $22 Strike. $0.33 Premium.
> 
> I actually don't want this to be over $22, though. LOL. But I don't mind either way...


Hi KJS. Sorry another dumb question--LOL. *Right now CVE is trading at 21.79.* If CVE goes over $22 before April 17/15 is their a good chance that you will be exercised and have to give up your 1000 shares of CVE at an earlier date then April 17/15?

So basically your collecting $330 in premium income. The worst that can happen to you is that you have to give up your 1000 shares of CVE at $22?


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## KaeJS

Squash500 said:


> Hi KJS. Sorry another dumb question--LOL. *Right now CVE is trading at 21.79.* If CVE goes over $22 before April 17/15 is their a good chance that you will be exercised and have to give up your 1000 shares of CVE at an earlier date then April 17/15?
> 
> So basically your collecting $330 in premium income. The worst that can happen to you is that you have to give up your 1000 shares of CVE at $22?


The likelihood of my options being exercised before April 17/15 is low - but it "could" happen if the stock goes over $22.

I bought the 1000 shares of CVE at $21.95. Since then, I have been on record for the dividend payment ($266.20) and have sold my call ($310.05 after commissions). So, even if I do get called on my shares at $22, then yes, I will have to give them up at $22, which would net me another $50 (0.05 x 1000).

My total profit would be 266.20 + 310.05 + 50 = *$626.25*

However, I do hope that I do not get called on my shares. I hope that CVE is somewhere around $21.50 so I can write yet another covered call for May/15


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## Squash500

KaeJS said:


> The likelihood of my options being exercised before April 17/15 is low - but it "could" happen if the stock goes over $22.
> 
> I bought the 1000 shares of CVE at $21.95. Since then, I have been on record for the dividend payment ($266.20) and have sold my call ($310.05 after commissions). So, even if I do get called on my shares at $22, then yes, I will have to give them up at $22, which would net me another $50 (0.05 x 1000).
> 
> My total profit would be 266.20 + 310.05 + 50 = *$626.25*
> 
> However, I do hope that I do not get called on my shares. I hope that CVE is somewhere around $21.50 so I can write yet another covered call for May/15


Thanks for the excellent response KJS. I'm getting very interested in learning about Options. Just borrowed the book *Trading Options for Dummies* from the library.


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## KaeJS

I haven't read it, but I hope you enjoy it!


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## Squash500

KaeJS said:


> I haven't read it, but I hope you enjoy it!


 Thanks KJS. The book's written by a very smart guy. Dr. Joe Duarte. *He's a Medical Doctor and an investment advisor.*

What a combination--LOL

http://www.financialsensearchive.com/fsn/team/duarte.html


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## thepitchedlink

Bringing this back up ....anyone averaging down yet?


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## AltaRed

Goldman Sachs (I believe) recently came out with an analysis that says oil has gotten ahead of itself and while it might increase slightly this year after another dip, longer term, GS is forecasting even lower Brent prices in the years to come (approximately no higher in 2020 than today). 

I wouldn't be putting any new money in the oil patch very quickly without some concerted effort by OPEC/Saudi (change in policy) to shore up prices.


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## Eder

I thought GS predicted $180 oil last spring then $20 oil in October....I guess another wild guess
in the middle and they'll be correct on one of these.


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## Fraser19

Any new thoughts on this with the news on the 3.3 billion sale?
CVE is something I have been watching for a while now, never pulled the trigger and there are other things I wish to take on before CVE. 

Much like Alta said I am not too sure about putting money into oil right now. It's clear to me that anything can happen. But I am interested to see what you guys think about CVE with the new sale?


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## doctrine

They have a ton of cash but still have a payout ratio much greater than 100%. Like Crescent Point, eventually they'll need to cut the dividend if oil doesn't improve, even with the cash injection, although it does buy them a couple of years potentially.


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## pastorash

I averaged down on Cenovus last December, hoping the oil price thing would be (relatively) short lived. Alas, I'm regretting it, it's the biggest drag on my small RRSP portfolio, and like many others I'm expecting the dividend to get cut at some point. To what though is the big question.


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## 1980z28

I personally picked up a small position a few days ago,will not add to it in the near future unless there is a reason ,so hold on,unless you sell for tax reason


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## Fraser19

Nice to have something this year in the energy section that is in the green. Now I know it could be in the red tomorrow but I am pleased. 
Also I believe that they are releasing there earnings tomorrow, curious to see what that will look like.


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## thepitchedlink

Ooooo, div cut......job cuts too. This should be a red morning


Well, look at that....opening up. Interesting


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## Fraser19

Market has responded well to this news. Although I am disappointed in the loss of the 3% Drip discount but I am fine with the dividend cut.
I think CVE is a excellent buy right now and will go a long way in the future. I will probably pick up another 50 shares just to keep me dripping.


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## HaroldCrump

thepitchedlink said:


> Ooooo, div cut......job cuts too. This should be a red morning
> Well, look at that....opening up. Interesting


Shell cut 6,500 jobs worldwide and stock is up 4.50%
Market likes optimization and cost cutting


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## Fraser19

CVE has had an excellent run this month.
Not sure why it moving the way it is compared to other oil.

Any thoughts?


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## OurBigFatWallet

Cenovus cuts dividend by 69%. http://www.theglobeandmail.com/repo...nd-and-budget-as-loss-widens/article28712573/


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## AltaRed

There will many more of these in the industry in the months to come.


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## pastorash

I don't mind holding this until the cycle moves out of this funk it's in, but the dividend loss is unfortunate (and expected).


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## Fraser19

http://www.theglobeandmail.com/repo...in-securities-amid-oil-slump/article28740779/

Interesting read, I wonder what this will materialize into?


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## thepitchedlinkagain

Anyone got info here....I keep trying to resist the urge to grab a little more each week....


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## thepitchedlinkagain

Sharp drop this morning ......

I guess the market isn't that keen on Cenovus spending 17.7B$. I dunno, what's everyones take on this? sure makes them higher risk....seems to be a theme here of the big internationals leaving the oilsands.....Could be fantastic for the Canadian players that seem to be "gathering" up the oilsands assets......or really terrible if oil doesn't recover a bit here in the near future.....


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## redsgomarching

thepitchedlinkagain said:


> Sharp drop this morning ......
> 
> I guess the market isn't that keen on Cenovus spending 17.7B$. I dunno, what's everyones take on this? sure makes them higher risk....seems to be a theme here of the big internationals leaving the oilsands.....Could be fantastic for the Canadian players that seem to be "gathering" up the oilsands assets......or really terrible if oil doesn't recover a bit here in the near future.....


Analyst on bnn marked this as a long time move with the hopes of getting up to $60 per barrel. 
Also commented on the fact that they just added a lot of debt to their operations so it limits their flexibility with projects/cash flows.


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## doctrine

Have to take a look and see how bad the debt is, but CVE doesn't exactly have a big dividend they have to pay. They're issuing about 50% more shares for 100% more production and reserves. 5 years from now, this will probably look really good, but 5 years is a long way away. I would say the market doesn't like the contigency payments they have to make if oil spikes in the next 5 years, doesn't like that ConocoPhillips intends to sell all of their shares in 6 months (pretty dumb of them to announce that right away), and they own 25% of the company, and that they bought a huge pile of conventional assets which will require major capital to develop. Finally, given how many people are leaving, it's unlikely there's any takeover premium in the stock. At $15/share, it's a lot of value though. I can't see it going much lower.


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## AltaRed

Doesn't say a lot though at least in the near term to have Statoil leave, Total leave, Shell leave and now COP. It is now a bet on new pipelines and significantly improved crude prices.


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## doctrine

They're all selling their assets at 50-60% of replacement value. Do you want to own the company selling or buying those assets? If 2 of 4 (KXL/TM/L3/EE) major pipelines get done, then there will be excess takeaway capacity in 2020 and beyond. There are approx zero mega projects due to come online after the end of next year. Any projects beyond that are all incremental ones - I heard 100k barrels in all of 2019, which is ~3% production growth and 1/11 of Energy East.


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## AltaRed

The big boys don't throw in the towel lightly. They've all seen major decisions like this before. Having worked for a muti-national myself, these decisions take thousands of manhours of analysis and debate at all levels of management and the Board. They clearly think it is worthwhile to take their marbles elsewhere for whatever reason. 

That said, the lending institutions obviously think their loans will be safe. Time will tell.


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## thepitchedlinkagain

Thank you for the good info guys, that's what I like about this site. It's going to be interesting time ahead here in the patch (country)


As Red says " time will tell"


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## smc_99

*time to buy?*

Hi,

I've been watching CVE for a long time and am a small holder through the oil decline 
It seems that I have let the CVE shares decline enough, they could either be used in the future as a tax-loss harvest or I could average down the cost (initial position was bought around $24-25 per share).

I know that the market didn't respond favorably to the Conoco 17b dollar deal and more shares were issued. At $12.70/share, with WTI at ~$49.50/barrel I'm really starting to think that there is an approximate 30% upside with a target price around $17-18 per share (these figures are based on research reports/analysts and previous trading prices relative to oil prices.

What do people think of this stock?


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## pastorash

I got out a few years ago at a loss. I'd considered getting back in but honestly it seems that if I'm going to jump into the Oil Sands I'd consider a different name with "less" risk.

Just my opinion, based on hunches and headlines, there could be significant gains here, but too uncertain for my conservative portfolio.


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## AltaRed

I think the oil industry is in for headwinds for a very long time. Absent short periods of perhaps 1-3 years of 'higher' prices, there doesn't seem to be long term fundamentals here to support upward oil prices. Global oil demand will most likely start shrinking within a few years as renewables really take hold and energy storage becomes even more cost effective. You know the movement has gotten traction when China is making a big shift towards renewables. I suspect India will get on that wagon soon too and then the USA will wake up 5-10 years hence...despite Republican ostriches to the contrary. IMO, the oil companies and service companies are not long term stories. They are consolidation stories. I am staying out of them.


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## Fraser19

I have some CVE.
Personally I like the company, keep in mind I have done work for a lot of companies and Cenovus was the one I was always most fond of. I got in for my first buy in the low 17's and picked up some more in the 14's. I thought we were far down enough at that time that pushing it any further was going to miss the bottom. Guess I was wrong on that one.
I am interested to see what happens tomorrow as I think the deal closed today. I would buy more but I am more interested to see what happens once Conoco starts liquidating the 208 million shares. Which is weird that Conoco immediately announced they plan to liquidate immediately once the lock up is completed. I don't see that being an easy thing to liquidate in a short period of time. If I have read correctly Conoco owns something around 16% of Cenovus.


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## accord1999

AltaRed said:


> You know the movement has gotten traction when China is making a big shift towards renewables.


You shouldn't over-rate the shift:

http://chinaenergyportal.org/en/2017-q1-electric-power-statistics/

Wind and solar are minor players in Chinese electricity generation, and electricity only accounts for a portion of total energy usage.


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## AltaRed

That will change as they have signed on for climate change abatement. 

However, the more important thing for this thread in particular (as it pertains to oil) is the move to EVs and thus limited growth, if any, in the consumption of oil.


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## accord1999

AltaRed said:


> That will change as they have signed on for climate change abatement.


China's self-declared goal for Paris is to peak their CO2 emissions by 2030.



> However, the more important thing for this thread in particular (as it pertains to oil) is the move to EVs and thus limited growth, if any, in the consumption of oil.


And China has the biggest new car market in the world and its oil consumption is still growing.


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## AltaRed

You miss the point that a superliner does not turn on a dime. There will be a lag in curtailing both coal fired generation and oil consumption, perhaps even 5 more years, but once the momentum has shifted and the statistics prove it, the 'wake' that comes with it could be substantial. One has to look out 5-10 years, not what is happening today.

Another example: It took me a long time to consider buying ATD.B since I foresee a shift in USA and Europe to EVs and there will be headwinds in the next 5-10 years on the profitability of gasoline stations and convenience stores. Sales will stagnate... if noti in the next 2-5 years, then shortly after that.

Added later: The two wild cards are obviously China and India. I think it is pretty clear where China is ultimately going (reduced oil demand - eventually) but India remains uncertain given it is an operating democracy with little ability to impose major top down policy changes. For one, China does not want to be beholden (vulnerable) to oil producing countries more than it has too, so there is an incentive to electrify much of its oil based consumption. How they do it without building more coal fired power plants (that are not already in development/construction) remains an open question.


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## thepitchedlinkagain

Well, went through 9.35 here.....where is this one going to stop???


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## AltaRed

thepitchedlinkagain said:


> Well, went through 9.35 here.....where is this one going to stop???


It is loaded with debt, aka Baytex, with its stupid COP deal. With no improved commodity prices likely for the foreseeable future (this year), and its CEO essentially turfed (retiring), I believe the share price slide will continue. Its book value is even in question at these price levels so the bottom is unknown. Perhaps $5? If I was to buy a O&G company (which I won't), it sure wouldn't be any company with an impaired balance sheet.


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## thepitchedlinkagain

Always good to hear your insight Red, thanks


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## AltaRed

thepitchedlinkagain said:


> Always go to hear your insight Red, thanks


Remember it is simply my opinion. If I was REAL confident about being right, I'd know how to trade these and potentially make a bundle through the business cycles. 

CVE could very well do a face plant and there is no one left in Canada (that I know of) big enough to take them over for say $10/share. I don't know that any International company has the balls to buy these things any more given it seems we cannot build a simple pipeline to either coast.


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## smc_99

I decided to re-buy today at $9.17. My average cost base is still $15.90 though...too bad this stock was trading near $20 when I last bought. My goal is 2019 for selling and a higher oil price. Hopefully they don't decide to hedge more of their oil at these low prices.


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## doctrine

CVE is really cheap at $9, but it is not without just concern. They took on a lot of debt, and oil prices have been declining.

There may be reason for hope. The first is their assets are prime; the second is their actual interest payments are low. Unlike stressed companies like Baytex, Cenovus still has access to investment grade debt. Here was their last debt issue of $2.9B US:

-US$1.2 billion principal amount of 4.25% senior notes due 2027
-US$700 million principal amount of 5.25% senior notes due 2037
-US$1.0 billion principal amount of 5.40% senior notes due 2047 

Cheap debt makes it more sustainable for the company to keep operating while waiting for higher prices or continuing to cut costs and sell assets. They also don't have much of a dividend (2% yield, or about $220M/yr), and they could probably cut it with no impact to share price, in fact it might be positive. I don't own any shares, but I would suspect the price can't go *much* lower (famous last words), while simply an oil price return to $55 would result in a big gain on the share price.


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## kac147

The past year, Cenovus has made a huge improvement financially due to the oil price was increased back to a stable stage. However, the market price still has not reflected the improvement yet.

After performing an analysis, I decided to purchase some shares at a bit higher than $12 per share. It is a very attractive price compared to the value analysis I did.

The only concern for me would be the high debt it has. However, it got a very high quick ratio which means it can meet its short term financial liabilities.

Hopefully, it will do better in 2018.

What are your comments on CVE.TO?


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## P_I

I sold my Cenovus last year for tax loss harvesting. with the view to possibly repurchase after 30 days (avoid superficial loss rules). At this point I'm awaiting Q1 results to re-run my analysis. 

Lots of moving parts with this company, management change, layoffs, asset sales, ... This makes is hard to understand the 'current' state of the business and therefore I'd put this company in the 'show-me' category, i.e. show me that you've turned the ship around and all the 'improvements' have made the company better and more profitable. 

BTW, if you use the advance search link near the top you would find the existing Cenovus thread, see http://canadianmoneyforum.com/showthread.php/15276-Cenovus-Energy-Inc-(CVE-TO)


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## robertsclak

This is a laggard in the oil patch.I am wondering if this is since the Husky take over,or is this the tendency with Cenovus.Any input is appreciated .Thanks


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## P_I

Much already discussed in the thread Cenovus Energy Inc. (CVE.TO) | Canadian Money Forum


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## robertsclak

P_I said:


> Much already discussed in the thread Cenovus Energy Inc. (CVE.TO) | Canadian Money Forum


I was hoping to get information on Cenovus's current situation.


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## doctrine

HSE has good assets, but not the best. It will take some time for CVE to sort out what they keep and what they jettison. And the stock price has already mostly recovered to 2017-2019 levels. CVE would probably even be higher had they not acquired HSE as I think it was an overall decrease in asset quality.

If I was on the hunt for a large cap recovery, I would stick with SU, which has better assets and is not in asset-disposal mode. Better quality, less de-leveraging, already actively buying back shares, and still 50% upside to get back to 2017-2019 levels. SU in the dog house a bit for their dividend cut, but CVE has pretty much trashed their dividend for a decade now too.

In my opinion, when quality/market leaders are cheap compared to the 2nd tier, it's better to go with 1st tier. You should at least be getting a discount with 2nd tier, and I don't see that with CVE compared to SU, for example.


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## robertsclak

doctrine said:


> HSE has good assets, but not the best. It will take some time for CVE to sort out what they keep and what they jettison. And the stock price has already mostly recovered to 2017-2019 levels. CVE would probably even be higher had they not acquired HSE as I think it was an overall decrease in asset quality.
> 
> If I was on the hunt for a large cap recovery, I would stick with SU, which has better assets and is not in asset-disposal mode. Better quality, less de-leveraging, already actively buying back shares, and still 50% upside to get back to 2017-2019 levels. SU in the dog house a bit for their dividend cut, but CVE has pretty much trashed their dividend for a decade now too.
> 
> In my opinion, when quality/market leaders are cheap compared to the 2nd tier, it's better to go with 1st tier. You should at least be getting a discount with 2nd tier, and I don't see that with CVE compared to SU, for example.


Thanks for input.I became a CVE owner with the Husky take over,I feel my investment has been discounted since amalgamation .I own BTE,SU,CNQ._ am hoping CVE will play catch up.It may be a long time frame,if it is more than 1yr ,I dont have the time._


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## AltaRed

robertsclak said:


> I was hoping to get information on Cenovus's current situation.


That would have resulted in exactly the same thing by tacking on a new post to an old thread. It still shows up as a new post and you would have the double advantage of continuity. Imagine that!.

I agree with Doctrine that both SU and CNQ have better assets and they are more continuous in focus. The best performing companies will be concentrated in fewer, larger and higher margin assets. I never thought much of the quality of Husky's assets. Very second tier and scattered in too many places.


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## doctrine

robertsclak said:


> Thanks for input.I became a CVE owner with the Husky take over,I feel my investment has been discounted since amalgamation .I own BTE,SU,CNQ._ am hoping CVE will play catch up.It may be a long time frame,if it is more than 1yr ,I dont have the time._


I have SU and CNQ. I also have ERF for my smaller play. CNQ and ERF have been multi-baggers for me but still only a 2x on SU so far. I would probably also rank TOU and ARX above CVE and both are approaching large cap status.


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## moderator2

We shouldn't have duplicate threads for specific stocks, so I merged these threads.


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