Cenovus Energy (TSX:CVE) Remains A Smart Buy Proposition: Here’s Why

Stocks of Cenovus Energy Inc. (TSX:CVE) surged over three per cent on Monday (At 10:30 AM ET), lifted by the rising crude prices. The West Texas Intermediate (WTI) Futures was up over one per cent to US$ 67 a barrel at the time of writing this while Brent Oil Futures also rose more than one per cent to US$ 69.44 a barrel.

Over 1.44 million Cenovus shares exchanged hands in less than two hours of the trading session, with a stock price of C$ 10.15 per share.

Let us glance at the energy company’s stock performance and financials:

Cenovus Energy (TSX:CVE)

The Alberta-based firm company’s share price is inches away from surpassing its 52-week high of C$ 10.77 apiece (Recorded on March 11, 2021).

The oil stock has risen almost 31 per cent against year-to-date (YTD). It has gained more than 69 per cent in one year, driven by its acquisition of Husky Energy in a US$ 5-billion deal. It currently the third-largest energy firm in Canada, with a market cap of C$ 20.45 billion.

The energy industry witnessed a gradual recovery in 2021, led by the slow reopening of travel operations in the first quarter. CVE stock has also rebound by over 144 per cent from its 52-week low of C$ 4.15 apiece (Recorded on October 26, 2020).

The firm recorded total earnings of C$ 220 million, representing earnings per share (EPS) of ten cents in the first quarter of 2021.

Cenovus Energy and its subsidiary Husky Energy reported its net production of 769,254 barrels of oil equivalent per day, an increase of 64.7 per cent year-over-year in the first quarter of 2021.

Cenovus’ One-Year Price Performance Against Moving Average Multiple and Volume. (Source: Refinitiv)

The stock price has breached its moving average multiple, propelled by the steady growth in oil consumption. Its 10-day average trading volume is 6.34 million shares, up against its 50-day average volume of 5.66 million.

As the pandemic-ridden world begins to ease up with inoculation campaigns and normalcy is restored, business and leisure travels are likely to bounce back. At the same time, supply chain snags will cease, and other oil and gas-related industries will propel into motion. In short, as the world emerges anew from pandemic, the oil and gas stocks such as Cenovus will resume their formidable giant-like status in the equity markets.

Cenovus stock is nowhere near its all-time high price, giving room for investors to add it to their portfolio. However, climate change crisis remains a challenge for oil companies and investors can explore CVE stock for short-term gains.

Please note: The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view. The reference data in this article has been partly sourced from Refinitiv.



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