Suncor Energy Inc. T.SU

Buyback shares now while at these low levels

[MigraineCall]

Given the choice, I am in agreement that the best use of cash now at these low share prices is for the company to buy back as much of it's stock as possible.

The present dividend already covers the interest paid to hold this stock in a margin account, so it costs nothing to hold. It is also one of the few that are 70% marginable at some brokers.

If you believe that oil and energy will become much more valuable and costly in the future, due to only 50% of global capital investment being spent in the industry as was spent in years before on the supply side, alongside increasing demand in the next few years, then the huge capital already spent in infrastructure and mines will be of tremendous value going forward.  With Fort Hills now running at an idle at 1/4 speed, increased production if needed is relatively easy to ramp up. The assets Suncor owns and the profits it will make will be hard for investors to ignore as csh piles up and dividends grow. Debt ratios won't be an issue with an increased value, revenues, and market cap.

It costs so much more today to commission such operations, and also in Canada we are simply paralyzed in this environmental, political, and burocratic quagmire we have created. Being Canada's energy powerhouse with everything already in place, producing, permitted, piped, and generating huge cashfow in the future will be hard for any investor to ignore. Price targets that are set today are for such a small timeframe, they do not consider the longer term future. 

It is unfortunate that the share price dropped today.  A whopping 68% of the shares are held by institutionals, many with pressures to adhere to certain dividend requirements, and other green directives, so the road may be bumpy during times like these. As shown by many on this board, there may be a lot of shareholders just hanging on, but disappointed with no dividend increase announcement this quarter, and are taking it out by selling shares on today's action.

As many energy names are down 20% from recent highs, this price is not unusual. Give it a few days for the disgruntled sellers to wash out, and we will see where this goes as oil inventories continue to drop, demand increases, and the oil price marches up.

It also moves with the US energy producers which are down, a rare disconnect from the oil price presenting us with an opportunity. Looking back, history shows us that there is a lot of catch up going to happen as the ratio returns to a normal correlation.

I'll wait, and hold for the long term.

[Obscure1]

A well written intelligent post.  Thanks for your contribution

[Spanito]

This post has been removed in accordance with Community Policy

[Speedy]

Watching the share price be decimated for a company making large amount of free cash flow, who have upstream, downstream, power generation and retail is a really really bad incentive for any other company to invest in Canadian oil. If Suncor can't do it then everyone else is doomed.  I have to ask myself why would Cenovus buyout Connoco, for their production and then buyout Husky for

[thegreattimario]

Ceo must be fired.

[thegreattimario]

Buybacks will never make a difference. Share count is to high. Not raising divy is a indicator that company is in bad shape for the future. Every oil and gas company is raising their divy except su. Not a good sign as management takes massive bonuses. Why do you think buffet bailed. 

[thegreattimario]

never forget sears pulled this same scam for years and then investors lost everything.