Cenovus Crushes The Fundamental Approach To Valuation
Every now and then a stock comes along that just drives you crazy. Cenovus has to be one of those story stocks. Given the keys to the oil empire in the split from Encana, Cenovus looked promising from every aspect. As a large Canadian company with the ability to produce major growth rates in production from the Christina Lake and Foster Creek projects, the investing community came to expect great things from this company.
I reviewed their January 2014 Presentation to find out the Oilsands technology they are using has a $45/bbl production cost. They have mitigated 85% of the Heavy oil discount. They have grown the oil production by 50% in the last 2 years! This presentation makes you feel like their should be a rocket attached to the stock price. They own two US refineries and would love to put their oil on the Keystone XL pipeline. So that appears to be holding them back.
OK, so this should be a monster stock. Let’s look at the chart. Starting at the top. The RSI has been trapped under 65 for most of 3 years. The relative performance to the SP500 in purple (SPURS) is showing underperformance for 2 years. The SCTR ranking shows Cenovus as being a below 50% stock for the last year. The recent news is it just crashed in relative ranking to every other $TSX stock to become the bottom 15% technically. That sounds like last quartile performance which can only be construed as poor.
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Cenovus Crushes The Fundamental Approach To Valuation
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