Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Suncor Energy Inc T.SU

Alternate Symbol(s):  SU

Suncor Energy Inc. is a Canada-based integrated energy company. The Company's segments include Oil Sands, Exploration and Production (E&P), and Refining and Marketing. Its operations include oil sands development, production and upgrading; offshore oil production; petroleum refining in Canada and the United States; and the Company’s Petro-Canada retail and wholesale distribution networks (including Canada’s Electric Highway, a coast-to-coast network of fast-charging electric vehicle (EV) stations). The Company is developing petroleum resources while advancing the transition to a lower-emissions future through investments in lower-emissions intensity power, renewable feedstock fuels and projects targeting emissions intensity. The Company also conducts energy trading activities focused primarily on the marketing and trading of crude oil, natural gas, byproducts, refined products and power. It also wholly owns the Fort Hills Project, which is located in Alberta's Athabasca region.


TSX:SU - Post by User

Comment by Mirko22on Jul 20, 2022 10:28am
138 Views
Post# 34836871

RE:So what is Elliott Up To?

RE:So what is Elliott Up To?
Experienced wrote: In the Q1 report about 25% of FCF came from refining and retail operations. If my numbers from a previous post prove to be accurate then almost half of SU's assets are tied up in these two areas. So from Elliot's perspective these assets should be sold since the return from these assets is low compared to the upstream assets.

While I am not sure that using the sale of the downstream assets to reduce debt is the best use of the money (but that is a topic for another day), Elliott has no interest in using the sale if the downstream assets for that purpose.  They are not long term investors.  They see an opportunity and want to get and out as quickly as possible and make a few bucks.

They would push for the proceeds if the sale to be used as a special dividend to goose up the SP for a short term pop and then get out.  Seen this strategy dozens of times over the past 50 odd years. If SU got what I predicted in an earlier post for the downstream assets then Elliott could see as much as $20 special dividend.

Don't know what they paid for their shares but in terms of simple math, based on FCF contribution, the SP of SU would drop by 25% without the downstream to around 30 and plus the special dividend of 20 would give them a combined exit return of 50 a share in a very short period of time.

This is game they are playing, plain and simple.

As I mentioned in an earlier post, for long term investors this strategy is shortsighted and if existing FCF was used better to maximize future growth of earnings, the SP would be a lot higher over time.


Excellent post with all valid points. I have seen the same being played by other activist. They care about how much they make and will investor out to dry at the end.

<< Previous
Bullboard Posts
Next >>