# Is Oil a Buying Opportunity ?



## dogleg (Feb 5, 2010)

Until this year I haven't invested in oil company stocks because I don't like the volatility. I did buy some Suncor at around $40. when oil was selling at around $100. Now SU is trading below $30. Is it a bargain at these prices ? Not just for SU but for oil companies in general . How long can oil stay down ?


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## PMREdmonton (Apr 6, 2009)

I think it is definitely a buying opportunity at present.

The only thing is that if there is more demand destruction in the probable upcoming recession, the prices may yet fall further for oil and the oil companies.

Suncor is actually an excellent buy right now if you have a long-term perspective. It only fell to about $20 in the last recession and I don't think it is likely to fall any further in this recession because this one looks like it will be milder and there will be no liquidity crisis.

I would wait out the majors a bit longer (BP, CVX, XOM) as there is still a lot of fear in the street. I would buy CVX at 80 or XOM at 60 and BP at 32.


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## dogleg (Feb 5, 2010)

PMR: Thanks. Looks like you see these three nearing their 52 week lows before they start to climb again - except for Chevron. Sounds like a fair bet to me. I think I was wrong in buying SU when oil was around $100. (hindsight) but the BNN gurus were talking it up pretty strong at that point. But who knew about all the financial / political breakdowns . Cheers.


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## dubmac (Jan 9, 2011)

I read an article by Avner Mandelman (Globe and Mail ROB) that suggests that deep cuts in the price of oil would help the West out of the woes that it is now in...see the article here http://www.investorvillage.com/groups.asp?mb=6781&mn=67424&pt=msg&mid=10837802. I don't know what effect deep cuts in the price of oil would do to the prices paid fro some oil stocks - probably not a good thing.


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## PMREdmonton (Apr 6, 2009)

dogleg said:


> PMR: Thanks. Looks like you see these three nearing their 52 week lows before they start to climb again - except for Chevron. Sounds like a fair bet to me. I think I was wrong in buying SU when oil was around $100. (hindsight) but the BNN gurus were talking it up pretty strong at that point. But who knew about all the financial / political breakdowns . Cheers.


Suncor is definitely a long-term play as they will be producing oil for a long time. Their current PE is probably at an all-time low right now. I don't think you could go wrong putting money there. I'll probably buy a tranche now and wait a bit to see if it falls further.


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## gibor365 (Apr 1, 2011)

PMREdmonton said:


> Suncor is definitely a long-term play as they will be producing oil for a long time. Their current PE is probably at an all-time low right now. I don't think you could go wrong putting money there. I'll probably buy a tranche now and wait a bit to see if it falls further.


I also like SU as a long term investment, from US oil players I like COP.


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## Banalanal (Mar 28, 2011)

What is it that people see in SU? Comparing it to the big players in oil, its valuation metrics, operating margins, yield, etc, does nothing to entice me. Is its reserves and ability to supply other countries warranting it's valuation being that much higher than CVX/XOM?


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## KaeJS (Sep 28, 2010)

Banalanal said:


> *What is it that people see in SU?*


Potential.

And it doesn't matter what they see in Suncor. The point is that people like it. That's reason enough to buy it.

Just like that stupid quote:

"Trading is betting on the emotions of the crowd"

.... or something like that


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## Banalanal (Mar 28, 2011)

Anybody willing to put out the argument why SU is more of a buy than XOM/CVX? What makes SU more valuable?


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## PMREdmonton (Apr 6, 2009)

Banalanal said:


> Anybody willing to put out the argument why SU is more of a buy than XOM/CVX? What makes SU more valuable?



I think the big thing is that they are going to be increasing their production steadily for a long time yet so you can't get too blinded by their current PE vs. Xom/cvx/cop.

The other thing is that their major oil supply is in a secure, stable country.

I also suspect there is more efficiency to be wrung out of their merger with Petro Can.


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## blin10 (Jun 27, 2011)

I'm slowly buying big oil companies as they get cheaper with a nice 6%+ dividends... such as pwe, cpg, pgh, cos, erf... I want them to keep dropping too, want to get alot more but I need to wait for my targets that i set... SU is at very nice level but they don't really pay a nice amount if you have to wait it out a year or two


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## Banalanal (Mar 28, 2011)

Is PWE's massive dividend safe? Especially with oil prices dropping? And that goes for the rest of them. It'd be nice to bundle them all up in an ETF as you'd think some of those dividends are not safe...


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## gibor365 (Apr 1, 2011)

Banalanal said:


> Is PWE's massive dividend safe? Especially with oil prices dropping? And that goes for the rest of them. It'd be nice to bundle them all up in an ETF as you'd think some of those dividends are not safe...


Sure you can buy CLO, it's very cheap now, just checked , they are 15.25 now, I sold in spring for 20.85....


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## Banalanal (Mar 28, 2011)

Meant those specific companies given CLO yields only 1.6% versus the aforementioned 6% average.


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## gibor365 (Apr 1, 2011)

Just came accross article supporting to invest now in oil/gas

http://dailytradealert.com/2011/08/27/the-only-gold-you-should-buy-today/


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## webber22 (Mar 6, 2011)

After reading that article I couldn't help but laugh when it said it was _"almost mathematically impossible to get more oversold than that."_ ... just thinking of $30 oil back in 2008


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## Toronto.gal (Jan 8, 2010)

Yes, it is and accordingly have added PBR shares, which are near their 52 week low.


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## gibor365 (Apr 1, 2011)

For several weeks I'm following high yield middle oil players AFV and FRU, but still didn't buy....


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## bigpun87 (Aug 17, 2011)

just bought a position in Daylight energy (DAY)

near 52 week low, 7%+ yield


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## Toronto.gal (Jan 8, 2010)

Should have bought BOE instead. 

Have many junior oil companies, but none makes deal with Exxon. 

http://www.google.ca/finance?client=ob&q=CVE:BOE


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