Thoughts on Suncor (SU)

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Is now the time to sell these stocks with what’s going on in the states and the phasing out of fossil fuels ?

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Asked on January 7, 2021 8:54 am
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Just happened to stumble across this :
https://www.fool.ca/2021/01/12/warren-buffett-say-no-to-most-investments/

A rebound is coming
Suncor Energy (TSX:SU)(NYSE:SU) remains in Buffett’s stock portfolio despite the -46.7% total return last year. Instead of ditching the largest integrated oil company in Canada, Berkshire bought five million more shares in 2020. As of the quarter ended September 30, 2020, the investment firm owns 19.2 million Suncor shares.

The ride was rough for companies in the oil industry. Suncor had to slash dividends by 55% after Q1 2020 to conserve capital and preserve the balance sheet. In the first nine months of 2020, Suncor’s losses were a staggering $4.1 billion compared to the $5.2 billion net income in the same period of 2019.

However, the fortune of Suncor could change. Wall Street investors are bullish on Canadian oil sands. Goldman Sachs and Morgan Stanley said in December 2020 that Suncor Energy and other oil sands operators are screaming buys this year. Because of improved cost structures and capital discipline, expect Suncor to generate more cash flow from now on.

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Posted by J SOLOMON
Answered on January 13, 2021 5:55 am
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Hi there,

As with most of questions of this nature, we cannot tell you if now is the time to sell the stock - that is a very personal decision that is based on your own investment profile. That includes your goals, risk tolerance, stage of life, etc. What we can say, is always circle back to why you bought it in the first place. Has the investment thesis changed? It sounds that based on your question, you might think it has. Does holding Suncor still fit with your investment profile?

If the thesis has changed, and it no longer fits an investor's profile - then is there another reason to hold it? Perhaps the investor is not seeing a better opportunity - ok to hold in this case until one comes up. However, if there is a better opportunity that is a better fit, then perhaps it may be time to sell and put those funds into that opportunity.

It is never an easy decision to sell a stock, particularly a historically strong one such as Suncor. I myself, hold Suncor and will be looking to exit my position once I identify the right opportunity. Although fossil fuels are going anywhere anytime soon, i prefer pipelines over producers in this environment. Until such time as I find that opportunity, I continue to hold.

Mat

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Posted by Mathieu Litalien
Answered on January 7, 2021 10:17 am