Suncor Energy Inc T.SU

RE:RE:RE:RE:RE:RE:RE:Dividend

[Oldnagger]

Thanks for your comments, the Suncor I once knew didn't give a hoot about sticking to their mission statement. That is why they went from being one of the smallest players to one of the largest players. Personally speaking,  my forte in life has always been about blowing up mission statements. Creativity and the willingness to change directions as necessary is the hallmark of success IMHO.

Co2Harvest wrote: On their website, they say that their mission is to transform their GHG footprint by growing their low GHG fuels and optimizing the footprint of their expositing business. While natural gas is an obvious pathway, it isn't the only one and as an investor I won't solve their problem for them. Instead, I will hold Suncor to their mission statement.

Oldnagger wrote: If Suncor wants to skate to where the puck is going, then that direction is towards natural gas . The price of nat gas is now equal or greater than Crude oil in most of the world outside North America. If the Americans were to stop their BS and actually do something significant to shut down coal (i.e a carbon tax ), then the price of nat gas in North America will also rise much closer to crude pricing.Western Canada has plenty of nat gas. What they do not have is  sufficient export capacity to move it , neither do they have the technological experience in order to process the nat gas into other less carbon intensive amd /or more transportable forms. That is where Suncor could play a significant role '
Witness the recent announcements by Petronas to develop Ammonia plants in Canada for its export to Japan. Have we as a country become so retarded that we cannot develop our own resources ??   

Experienced wrote:

prophetoffacts wrote:

bullbird wrote:
Apperently the CEO of Suncor thinks it the right way to go.

And time will tell if his strategy is right. SU believes there is more long term value than the market.
 

Here is my take

If you look at the financials when SU was trading in the 50s compared to now, there is no question that the company is stronger today than back then.  For these reasons the SP of SU is cheap and this is what mgt is looking at in terms of their decision to to do the buyouts.

So the question then becomes - Why is the market punishing SU?

The answer to this question has a number of dimensions....

1.....SU right now is for intents and purposes a "one trick pony" in that it is primarily betting on the future of oil and people view future oil as a declining business

2....other companies like CNQ are migrating to natural gas as its future as a Plan B

As I have posted numerous times here, SU's current strategy is OK for now given the market situation as per Point 1 above.  BUT, this is a short term thing and the company clearly needs to move to a Plan B which IMO is to pursue renewables using its tremendous cashflow and more importantly with regard to the SP, have an effective communications strategy to promote this shift in strategy.

I personally know of a number of early stage companies in the renewable/clean energy sector (many which are not publicly traded) with huge potential, possibly in the billions of dollars that SU needs to DD with and invest in the better ones.  The opportunity is there for the picking but they need to get off their butt and pursue them.

If they don't do this sometime over the next year then the SP will languish and possibly go even lower.  Conversely, if they do pursue this strategy then they wiil get a much higher market multiple and with their huge cashflow, see a return to previous highs for the SP or even higher.

Time will tell if they take advantage of this or not.

If they signal they are doing this then I will overweight my holdings and take my double or triple, if not, I will be a seller and getting outta Dodge City!!