Successful Inv says buy Suncor Energy
2016-03-04 20:59 ET - In the News The Successful Investor, in the March, 2016, issue, says buy Suncor Energy Inc., recently $30. The Investor said buy 11 times from October, 2009, to September, 2015, at prices ranging from $30 to $43. Assuming a $1,000 investment for each of the 11 buys, the $11,000 position is now worth $9,210. Suncor produced 577,800 barrels of oil equivalent a day in 2015, up from 534,900 barrels a day in 2014. Despite the higher production, the company posted a 2015 loss of $2-billion or $1.38 a share, mainly because it wrote down the value of its reserves in the wake of the oil price crash. Excluding unusual items, Suncor earned $1.01 a share in 2015, compared with earnings of $3.15 a share ($4.6-billion in total) in 2014. Cash flow per share slumped to $4.71 from $6.19, and revenue fell to $29.7-billion from $40.5-billion. This year, Suncor plans to spend $6-billion to $6.5-billion on upgrades and exploration. It also plans to close its $6.6-billion all-share takeover of Canadian Oil Sands, which owns 36.74 per cent of the Syncrude oil sands project (of which Suncor already owns 12 per cent). Suncor now trades at 5.3 times its likely 2016 cash flow of $5.70 a share, and its $1.16 dividend seems safe and yields 3.9 per cent. Buy.