| Sands Stocks Mixed Amid Oil Selloff | 11/6/09 |
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Much of the energy-tied equity sector got beat up on Friday, but upgrades and earnings kept sands stocks alive. So far it appears the August merger of Suncor Energy (SU) and PetroCanada has worked out well. The former, now the largest oil company in Canada, saw third-quarter earnings shoot up by 14% from the prior year. Profit for the period was C$929 or 74 Canadian cents per share. Suncor president and CEO Rick George said this of the post-merger performance, “The integration work we’ve completed in just a little over three months is already yielding some significant efficiencies that will enable Suncor to come out of this cycle stronger than ever as a globally competitive energy producer.” Suncor shares have turned negative fractionally for the session, likely as a result of oil’s -3% decline. Meanwhile other components of the Oil Sands Stocks Index are carrying the group higher by 1% on the day. Canadian Natural Resources (CNQ) is benefitting from an upgrade to Overweight from Equalweight at Barclays. The analyst’s $83 price target for the stock represents a nearly 30% premium to its current value. The company reported a -77% decline in third-quarter profit yesterday, but said it would boost capital spending by more than 25% in 2010, which points to an optimistic outlook according to Reuters. North American Energy Partners (NOA) is leading the sector with a 3% run to end the week. The company also saw its profit slide in the three months ended September 30, but president and CEO Rod Ruston remained optimistic. Ruston noted “good progress” amid “continuing tough market conditions,” in the November 3 earnings release. He continued to note that in oil sands, the company saw a return in volume helped by their long-term contract with Canadian Natural and a new three-year contract with Royal Dutch Shell’s (NYSE: RDS-A, RDS-B) Canadian subsidiary. Oilsands Quest (BQI) is the group’s laggard today, down by -2.5%. The stock has been quite volatile recently, swinging by as much as 10% between its highs and lows for the last week. A look at the Oil Sands Stocks Index’s six month chart shows that it has been subject to considerably more volatility than the S&P 500, though its overall trend remains similar to the broad market. Whether trading or betting on the long-term promise of the oil sands sector, investors can look to the Oil Sands Stocks Index for performance trends and a suite of other metrics at tickerspy.com. |
