AUS
NZ
UK
CA
USA
IND
Highlights
- After Russia ordered troops into a couple of rebel-held areas in Ukraine, oil prices began rocketing
- Canada, the US and other Nato allies have promised sanctions on the world’s second-biggest oil exporter
- The stocks of Cenovus Energy Inc ballooned around three per cent in premarket trading.
After Russia ordered troops into a couple of rebel-held areas -- Donetsk and Luhansk -- in Ukraine, oil prices began rocketing, quickly reaching a seven-year high. Brent was at $99.38/bbl at one point, with fears that a war is looming over Eastern Europe.
Canada, the US and other Nato allies have promised sanctions on the world’s second-biggest oil exporter. Tuesday, February 22, also saw German Chancellor Olaf Scholz block the certifying of the Nord Stream 2 pipeline.
Russia is Europe’s biggest gas provider. Germany is particularly dependent on Russian oil and gets a significant amount of it through pipelines via Ukraine. Nord Stream 2 would have brought gas directly to Germany from Russia. Ukraine was against the pipeline.
Meanwhile, the stocks of Cenovus Energy Inc ballooned around three per cent in premarket trading. Let’s look at its performance and fundamentals.
Cenovus Energy (TSX:CVE)
Cenovus Energy’s stock closed at C$19.60 Friday, February 18, after over 7.2 million shares switched hands during the day. In fact, the CVE stock has been one the most active stocks traded in recent weeks, having featured in the top three stocks for active volumes on multiple days. Its 10-day average volume is 9.5 million.
Also read: Imperial (IMO) & Tourmaline: TSX oil stocks to buy as OPEC lifts output?
As of writing, the CVE stock was trading at C$20.21 which isn’t too far away from its 52-week high of C$20.56 clocked on February 14 and it remains to be seen if the stock will continue to top that. It has gained 118 per cent in the last year and nearly 12 per cent in the last month. It is up about 28 per cent year-to-date (YTD), bettering even its index’s solid performance.
The company achieved record oil sands production in Q4 2021, putting out 825,000 barrels of oil equivalent per day. Its cash from operating activities was C$2.2 billion.
Also read: Enbridge (ENB) & CNQ: TSX oil stocks to buy as gas prices break records
Bottom line
A rise in crude oil prices does not necessarily translate into profit and returns to listed energy companies. Cenovus Energy incurred a loss of C$408 million in the last quarter.
World over, stocks seem to be going through a bearish spell. By some comparisons, the Toronto Stock Exchange might have weathered the storm better than some other indices.
Much credit for this would likely have to go to the energy sector. As the benchmark index’s second biggest player, the energy sector accounts for over 15 per cent of it.
Image source: © 2022 Kalkine Media®
Also read: This Canadian oil company saw its stock gallop 288% in a year!
At a time when many are seeing losses, the S&P/TSX Capped Energy Index has soared 20.51 per cent YTD. With a market cap of over C$40 billion, Cenovus is its third-biggest player. The CVE stock is also a quarterly dividend payer, with a dividend yield of 0.71 per cent.
However, parking money in a stock merits a copious amount of research into its fundamentals, performances and reports as well as into the sector and foresight.
Also read: Is Suncor (TSX:SU) an oil stock for the long haul?
