Global Stock Markets
The S&P/TSX Composite Index may be up about 4.5 per cent for the year, but the S&P TSX Capped Energy Index is down more than 13 per cent
The macro picture for Canadian oil companies lately is a messy one, with intrigue in the House of Saud, threats of Norwegian divestment and a Keystone pipeline leak just the latest concerns for investors.
Amid the drama, the S&P TSX Capped Energy Index has tumbled more than 13 per cent on the year, while the S&P/TSX Composite Index overall is up 4.63 per cent, despite a 24 per cent rally in the price of WTI oil over the past year. With that in mind, here are three stocks that could have upside despite the uncertain market:
Whitecap Resources Inc.
Calgary-based Whitecap announced last week that it had struck a $940-million deal with Cenovus Energy Inc. for a majority stake in a Saskatchewan oil operation.
Shares of Whitecap are down 25.08 per cent for the year, closing Friday at $9.11, but the deal met with approval from some analysts.
After the deal was announced, Raymond James increased its target price on Whitecap shares, to $14 from $13.25, and maintained its outperform rating on the stock.
Obsidian Energy Ltd.
Has Calgary-based Obsidian Energy managed to put the past behind it? The company announced last Wednesday it had reached a settlement with the U.S. Securities and Exchange Commission over fraud-related allegations that stemmed from the company’s previous life as Penn West Petroleum Ltd. In agreeing to pay the US$8.5-million penalty, Obsidian did not admit or deny the accusations.
Shares of Obsidian gained 1.91 per cent Friday, closing at $1.60. They were still down 32.49 per cent for the year.
National Bank Financial called the settlement, “an unfortunate reality, but a net positive in the sense that the resolution removes a black cloud from over the recently transformed, Obsidian Energy.”
Enbridge Inc.
According to some analysts, the time to take a stake in Calgary-based Enbridge may be nigh — if you hadn’t already.
Enbridge reported earlier this month third-quarter earnings of $765 million, up from a loss $103 million for the same three months last year. However, shares of Enbridge are down 20.6 per cent for the year, and 13.31 per cent for the past month, closing Friday at $44.86.
BMO Capital Markets said Friday in a note — headlined “Once in a Multi-Year Buying Opportunity” — that the shares were trading lower “on the back of funding concerns and fears that the 10-12 per cent dividend growth guidance will be reduced.” BMO, however, said that the approximately $9-billion drop in market capitalization is “a material overreaction,” and kept its outperform rating and $70 target price on the stock.
The macro picture for Canadian oil companies lately is a messy one, with intrigue in the House of Saud, threats of Norwegian divestment and a Keystone pipeline leak just the latest concerns for investors.
Amid the drama, the S&P TSX Capped Energy Index has tumbled more than 13 per cent on the year, while the S&P/TSX Composite Index overall is up 4.63 per cent, despite a 24 per cent rally in the price of WTI oil over the past year. With that in mind, here are three stocks that could have upside despite the uncertain market:
Whitecap Resources Inc.
Calgary-based Whitecap announced last week that it had struck a $940-million deal with Cenovus Energy Inc. for a majority stake in a Saskatchewan oil operation.
Shares of Whitecap are down 25.08 per cent for the year, closing Friday at $9.11, but the deal met with approval from some analysts.
After the deal was announced, Raymond James increased its target price on Whitecap shares, to $14 from $13.25, and maintained its outperform rating on the stock.
Obsidian Energy Ltd.
Has Calgary-based Obsidian Energy managed to put the past behind it? The company announced last Wednesday it had reached a settlement with the U.S. Securities and Exchange Commission over fraud-related allegations that stemmed from the company’s previous life as Penn West Petroleum Ltd. In agreeing to pay the US$8.5-million penalty, Obsidian did not admit or deny the accusations.
Shares of Obsidian gained 1.91 per cent Friday, closing at $1.60. They were still down 32.49 per cent for the year.
National Bank Financial called the settlement, “an unfortunate reality, but a net positive in the sense that the resolution removes a black cloud from over the recently transformed, Obsidian Energy.”
Enbridge Inc.
According to some analysts, the time to take a stake in Calgary-based Enbridge may be nigh — if you hadn’t already.
Enbridge reported earlier this month third-quarter earnings of $765 million, up from a loss $103 million for the same three months last year. However, shares of Enbridge are down 20.6 per cent for the year, and 13.31 per cent for the past month, closing Friday at $44.86.
BMO Capital Markets said Friday in a note — headlined “Once in a Multi-Year Buying Opportunity” — that the shares were trading lower “on the back of funding concerns and fears that the 10-12 per cent dividend growth guidance will be reduced.” BMO, however, said that the approximately $9-billion drop in market capitalization is “a material overreaction,” and kept its outperform rating and $70 target price on the stock.
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