The Great "ESG Discount"Over the past weeks and months all I have been hearing is 'when will the generalists' show up and begin investing in energy. There is no doubt that at >WTI$70 that the Canadian Energy Sector is selling at a steep discount compared to 2020, 2018, and years earlier.
It is almost unfathomable that so many mutual funds and pension fund, etc have fallen for a false ESG story that promotes Canadian Energy Companies as being a poor investment - these are the smart minds that should be investing in the best interest of their clients.
Do these "smart" managers think Russia cares? How about the Saudi's, or Iranians? Or maybe the Chineese do? Nada.
If Canadians dont believe in their own energy sector, who will? Canada has the 3rd largest reserves in the world, and Ontario and Quebec still need to import oil to meet current demand.
CPG is in the same boat as all other Canadian Energy Companies.
What the management of these companies need to do NOW MORE THAN EVER is show that they are creating shareholder value, they need to visibly demonstrate successful NCIB's and reinitiate dividends - this will push the share prices higher. The better this sector performs, the more the "generalist" mutual funds and pension fund manager will be inclined to invest, or be seen as underperforming the general indexes.
In the case of CPG - I would argue that at some point it will have to start buying out smaller companies, and buying new assets to ensure its continued prodcution - it's stock is its currency - and you can't be buying assets at WTI$70 or WTI$75 with a $5.00 stock.