RE:RE:RE:RE:RE:RE:RE:Bought 750 moreNo, I haven't factored in the buybacks...which SU still has around 30 million more shares to buy for the rest of year (from Q1). That being said, for a stock with 1.522B shares outstanding, that isnt really make much of a dent in the share count...at $100 oil, 5ev/cf and 1.49B shares, price per share goes up about $1 USD to $55.64
As for ATH and a bunch of other, they've seen a nice lift...but most are nowhere never th 4x EV/CF multiple that nutall likes to apply. Fact of the matter is, are there any buyrs willing to bid up the prices of these stocks to anything near what fundamentals consider "fair value", or will they largely have to rely on their own buybacks and M&A activity to realize shareholder value?
If everyone sees this sector as a "trade"/tactical allocation, rather than an "investment"...its going to be difficult to get there
That being said, this is nothing new and has basically been the case since the 2014 oil crash.
ManitobaCanuck wrote: Thx for deflating my balloon of optimism with some reality check . Guess I will be happy for this to reach 50$ atleast .My acquisition price is low ,so possibly I could hold for a bit n enjoy the dividend in the meantime .
Guess have you factored the stock buybacks in the equation?
Lol ,but again markets tend to surprise us .Remember Athabasca Oil ,when we had a conversation at 18 cents n sitting at a dollar now .
Chris007 wrote: 5X EV/CF seems to be the typical multiple for the large caps over the long term...I guess investors are willing to award CNQ that multiple due to it proving to be THE all-weather/any market condition Canadian o&g stock to own.
I mean, in 2020, when most companies had to cut their dividend, take on more debt, and cut capex/production...CNQ was growing production, keeping their dividend, making acquisitions and paying down debt...which is pretty crazy when you think about it
That being said, never say never i guess.
However, on the other hand, as NPCexe pointed out:
1) its going to be difficult for oil prices to stay above $100 for any sustained period of time....obviously the current competitive environment for oil is much different than the late 90s-early 2010s where the key narrative was that of peak supply (AKA the world is running out of oil). Obviously the shale revolution radically changed the situation,since it turns out thats theres a hell of a lot more oil in the ground than anyone ever imagined, albeit, that it is more expensive to extract than conventional
The EIA expects a gradual ramp-up in US production back up of production to an average of 11.8M bpd in 2022...obviously $100 crude would speed up that process, and likely lessen producers hesitancyy about increasing production
2) OPEC+ is still sitting on the sidelines with 8 million bpd of spare capacity (
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/061521-top-oil-forecasters-warn-oil-prices-could-hit-100b-this-year)
Fact of the matter is, there are no PHYSICAL constraints on supply...the reason that prices are as strong as they have been is almost exclusively due to the fact that supply is being suppressed as a financial decision, due to the covid pandemic.
ManitobaCanuck wrote: Thx buddy .
Don't you think these stocks might get re rated or CNQ might have a better EV/fcf when oil is at 100$