Tuesday, August 25, 2020

Suncor Energy (TSX:SU): Warren Buffett Just Increased His Stake in This TSX Giant

 Here is the article. 

Here are my highlights for 10 minutes reading:

  1. Warren Buffett's investment firm held 14.94 million shares in Suncor at the end of March 2020, now 19.94 million shares at the end of Q2. 
  2. Suncor share price $34 per share, 10.7% dividends in February 2020
  3. Suncor is currently valued at a market cap of $33.5 billion. Its price-to-sales multiple of 1.1 and price to book ratio of 0.92 indicates that the stock is cheap

According to Berkshire Hathaway’s recent 13F filings, the company has increased its stake in Canada’s energy infrastructure giant Suncor Energy (TSX:SU)(NYSE:SU). Warren Buffett’s investment firm held 14.94 million shares in Suncor at the end of March 2020. Its holding increased to 19.94 million shares at the end of Q2.

Warren Buffett now owns US$318.36 million in Suncor stock indicating a 1.3% stake in the company. While Buffett has been a net seller of equities in 2020, his investment in Suncor should encourage investors.

Berkshire Hathaway holds a position in Suncor since the fourth quarter of 2018 when the stock was trading at $34 per share. Suncor was then a blue-chip dividend-paying company. It, in fact, raised dividends by 10.7% in February 2020 which would have been the company’s 18th consecutive year of dividend increases.

However, the COVID-19 pandemic wreaked havoc and decimated energy stocks that were hurt by global lockdowns and a price war between Saudi Arabia and Russia, resulting in a massive oversupply of crude oil.

And more

In the June quarter, Suncor reported sales of $4.2 billion, down by a significant 58% year over year. Its net loss stood at $614 million in what was the worst quarter for oil stocks in several decades.

However, Suncor is currently valued at a market cap of $33.5 billion. Its price-to-sales multiple of 1.1 and price to book ratio of 0.92 indicates that the stock is cheap. Earnings are also forecast to rise at an annual rate of 20% between 2021 and 2024.



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