RE:RE:RE:RE:Low share price is $25mm per month100% green energy? LOL! That is a bit extreme. You should sell now.
My money is in Suncor.
I think that oil production will be around until we kill ourselves off, and it will be produced until it is no longer available. Through the next 100 years, long after we are gone, we will still need plastics, petrochemicals, ashpalt for roads, medicines, plastics, fertilizers, and even energy.
Less developed countries cannot transition as fast as people think, and along with their population explosion, they will be responsible for the increase in fossil fuel consumption in the immediate future even as prices increase. They do not constrain themselves with carbon taxes as we do, and will use more and more even as they increase their green energy sources.
When I was younger, 40 years ago, I used to buy beat up cars, repair the mechanical and bodywork, and sell them to earn money.
I see Suncor in the same state at present, beaten down and broken.
It is down now for so many reasons, but has so much potential for a big rebound. The cash flow, the reserve life, the downstream and upstream vertical integration, and the fact that mines are producing at a fraction of capacity. Present water issues at the mine slowing production are temporary, and will be dealt with as overburden is removed over the next few months.
What can move this stock? Management is not deaf to the calls of the investment community, and has a longer term vision than those on this board. Once the current winds of fossil fuel divestment stops, and investors see the cash it generates amongst others, it will receive attention as a shift to commodoties occurs and market forces rebound. They could start a few investments and moves into carbon capture, and more announcements for some green energy initiatives like the $300 million windfarm it owns. After some debt is paid down, an announcement to increase dividends, along with the NCIB will do a lot.
These prices are a gift, and rare opportunity. I am even buying more call options daily.
But that's just me...
Tommy123 wrote: Agreed. Suncor needs to get out of the O&G sector while there is still some value in terms of their assets, and transition close to 100% to green energy. That's the only way I think they'll make it, IMO. With ICE car sales banned by 2030 (I know technically it's 2035, but I've heard that will be moved up to align with Europe), it may be too late for Suncor.
Experienced wrote: Vlosun wrote:
You can add the fact that Suncor will repeat these buybacks for the next 3 years. It can be estimated that 250 to 300 million shares will be repurchased at the start of 2025, in three and a half years. If they increase the dividend by 25 percent as planned it will therefore be $ 500 to $ 600 million that Suncor will save each year starting in 2025. With a lot of debt paid and a smaller dividend Suncor would have to free up $ 5 billion a year to make a shift and close. reposition while paying a generous dividend. THE question, will it be too late? Where on the contrary will we have better visibility on the survival of gasoline and to what renewable energy we will turn to replace the part of the cash flow coming from refining if the electric car really becomes democratized.
Good question!
As you probably know, I have posted in the past that the company needs to develop a plan to morph into renewable energy company and to effectively communicate their strategy. My other point was that I didn't see mgt needing to do this immediately.
That said, if we look at your question from the perspective of mgt - what do they see?
1......the transition to renewables will take at least one generation to happen if not two or three
2....the speed at which politicians want all this to happen will in all probability result in a lot of mistakes which will make oil even more valuable in the future
3.....the corollary to point 2 is that once politicians see their mistakes they will become increasingly desperate and throw even more money at companies which have renewable energy projects
4......right now the investment community is enraptured with anything renewable and have bid up the cost of poker for those wanting to join the game and so it is hard for mgt to find projects that meet decent metrics in terms of payback etc
When look at it from this perspective there isn't a compelling reason to join the renewable energy party right now unless there a special situation or a promising early stage company to partner with.
The problem investors face in this situation is that with the mania about renewables, the SP of companies like SU and CNQ suffer and worse yet this negative sentiment feeds on itself creating a downward spiral.
Frankly for long term investors this presents a great opportunity to snag cheap shares but only if ultimately mgt does really have a renewable energy plan.
What am I looking for?
Sometime over the next year, mgt articulates in very clear terms a renewable energy plan of sufficient size and scope to have a meaningful impact on future earnings. They don't have to buy something right away but clearly message that are going to be big players over the coming years.