RE:RE:Maybe this stock's fair value is $5.53 at $73 oil.@LiquidOctupusV2: Good points! I will also add that Bloomberg just did an analysis of the top performing strocks year-to-date on the S&P/TSX energy indices. So where does CPG rank? 5th!
Yes, that's right, based on year-to-date performance (up until June 25th), CPG has outperformed all energy stocks on the indices, except for 4. Here is the ranking based on performance:
1) ERF - 132%
2) MEG - 105%
3) TOU - 98%
4) IMO - 97%
5) CPG - 94%
6) VET - 75%
7) ARX - 72%
(Please note that only stocks listed on the aforementioned indices were included -- this does not include many small caps).
LiquidOctopusV2 wrote: People might think differently because as early as last October this stock was trading in the $1.50 range. That's not that long ago. It's been stuck between approx $4.70 and $5.70 since mid-March. And, that's why the arguments on this board are getting so repetitive. Nobody has much to say.
Even though people are worried - right now - about peak oil (and this is something we agree on). The fact that peak oil is still decades away hasn't seem to sunk in. There's not future in a the Canadian oil patch, even though the market isn't going to meaningfully change because of energy transition for 25 years. Canadian stocks always have to prove themselves more than their American counterparts but the market comes around. I've been investing in oil a long time. Things build slowly then a breakout. You got to take some profits while you got it.
Here's what actually holds CPG back: debt levels, being Canadian, lack of action on NCIB and the dividend, and it's still high risk. All these energy stocks are still high risk.
Pandemic recovery looks good but is still beset on all sides by uncertainty. The dividend is not built into the price. The market isn't jumping in that readily. Some of my other O&G stocks have done better than this. But none of them have had their breakout moment. The market still is on show-me mode.
JamesT wrote: Nothing more nothing less. A potential dividend increase is already factored into the share price based on the price of oil and CPG's management's ability to issue a dividend. The prospect of this stock going back to $20+ is non existant since in 2014 people were worried about peak oil with no conversations about oil demand peaking. Shale oil taught investors that oil supply will is plentiful with a higher price point and thus keeping cap on oil prices.
The best we can hope for is perhaps this stock to go over $6 @ $76 WTI, $6.50 @ $80 WTI, $7.50 @ $90 WTI. Maybe we will move up over $10 if oil stays above $80 consistently for 1-2 years (highly unlikely). Maybe this stock will get a bump of $0.50 with a worthwhile dividend increase.
The downside on the other hand, if oil goes below $70, this stock will most likely move under $5, $4.50 @ $65, and god forbid wti goes below $60.
Why would anyone think differently given we've been rangebound at around $5.50 even though WTI increased by 10 bucks over the last couple of months?