RE:Warren Buffet and Hot-Head Michael Wickham on SU Welcome Mr. Buffet and a new 52 week high!
Globe says Buffett finds Suncor cheap enough to buy
2013-08-16 08:37 ET - In the News
The Globe and Mail reports in its Friday edition Warren Buffett has accumulated a stake of 17.8 million shares in Suncor Energy, Canada's biggest oil and gas producer. The Globe's Tim Shufelt writes his investment is worth $620-million at the current share price. "It demonstrates some faith in the future of the oil sands in the American mind," says Michael Smedley, chief investment officer at Morgan Meighen. It may be the first time Mr. Buffett has invested in a Canadian company. The famously patient investing guru first hinted at his interest in the Canadian energy sector five years ago, when he and fellow tycoon Bill Gates made a stealth visit to Canadian Natural Resources' Horizon project near Fort McMurray. The mere whiff of Mr. Buffett's presence lifted hopes for the oil patch, then besieged by environmental criticism after 500 ducks died on a Syncrude tailings pond, and a mutated fish with two jaws was found in Lake Athabasca. Suncor has obvious appeal to those hunting for cheap energy stocks. It is cheaper than most of its peers in terms of its share price to cash flow and book value. Mr. Buffett likes companies that generate enormous free cash flow and start returning that to shareholders.