Suncor Energy stock price is down 20% since August, is it a “Buy” now
The price of Suncor Energy (NYSE:SU) stock has weakened from $17.08 to $13.52 in less than thirty days and the current price stands around $13.64. In my opinion, Suncor Energy is a stable company that pays a very good dividend.Fundamental analysis: Suncor Energy is preparing for a safe and staged return to normal operations
Suncor Energy primarily focuses on developing petroleum resource basins in Canada’s Athabasca oil sands but the company also trades in crude oil, natural gas, byproducts, refined products, and power. Suncor Energy published recently revised 2020 guidance and the company reported that expects to achieve full mining rates of ~300,000 bbls/d by the middle of Q4. Suncor Energy expects that total production in 2020 will be (boe/d): 680,000–710,000 and capital spending for full-year is expected between $3.6B and $4.0B.
The company increased its revenue in 2019 to $29.5B from $28.23B in 2018 and the growth projects will ensure that the numbers will be moving up in the future. If we compare total stockholders’ equity of $26.89B and the market capitalization of $20.67B, we can notice that this stock is not overvalued and maybe now could be a good time to buy this stock.
Suncor Energy has paid more than $5B dividends to its shareholders in the last three years and this number can be even bigger in the future. Very important information for potential investors is the fact that Berkshire Hathaway increased its position in this company and added around 5,000 new shares in 2019. Berkshire Hathaway has paid between $28-$33 per share which is much above the current price of the stock.
There are some obvious risks when it comes to buying Suncor Energy stock and there are also several negative facts that are connected with this company. Negative fact is that Suncor Energy reported a larger than expected Q2 adjusted loss and a 58% Y/Y decrease in revenues. Despite this, the company is preparing for a safe and staged return to normal operations and the revenue will probably raise in the future.Technical Analysis: $10 represents a very strong support levelData source: tradingview.com
When we take a look at the chart above ( one year period), we can see that the price of this stock has weakened from $34.5 to $9.61 and started to raise. On this chart, I marked important resistance and support levels.
The important support levels are $12 and $10, $16 and $20 represent the resistance levels. If the price jumps above $16 it would be a “BUY” signal and we have the open way to $18. Rising above $20 supports the continuation of the bullish trend and the next price target could be located around $25. If the price falls even more in the upcoming period, every price in a range from $10 – $12 could be a very good opportunity for buying Suncor Energy stock.Summary
Shares of Suncor Energy could be a very good investment option and most financial analysts are also expecting its price to rise considerably in the next several years. Very important information for potential investors is the fact that Berkshire Hathaway increased its position in this company and added around 5,000 new shares in 2019. Berkshire Hathaway has paid between $28-$33 per share which is much above the current price of the stock.
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