Things that could squash the bull caseIn any investment decision you have to weigh what could go right versus what could go wrong. In CPG's case these could weaken the outlook:
- WTI weakens substantially. This is the most important determination of where CPG goes from here. A return to the $40's would wouldn't kill the company but cause the share price to return to the 3's or lower
- Further pipeline delays. Although CPG is not dependent on increased capacity, the overall effect on Canadian oil prices would put a damper on oil stocks.
- A bear market or, worst case, a global financial meltdown.
- Failure to deliver the promised transition plan objectives. Investors want to see debt shrink and a return to profits.
What are the chances of any of the above taking place? If there's a low probability then CPG represents an opportunity for profit. A high probability means CPG tanks.