Suncor Energy Inc. (USA) (NYSE:SU) — On Nov. 22, I placed SU on my trading list at $32 with a target of $38. But this volatile energy stock surprised me, falling to under $30. However it reversed up at just under $30, opening a gap from $30.28 to $31.36 as it jumped to over $33 in two sessions.
Since then it has been consolidating in a small pennant at about $32. However, since gaps of this nature tend to fill, try to buy SU stock at $31 in an attempt to again trade it to $38.
The merger with Petro-Canada made this oil and gas producer one of the largest energy companies in Canada. It is focused on Alberta’s Athabasca oil sands and is combined with supporting operations in refining and marketing. Standard & Poor’s estimates that this company’s production will grow at 6%-8% per year through 2020.
S&P added SU stock to its “Top-10 Portfolio.” They project that operating costs will be aided by an increase in operating efficiencies, low natural gas prices and a weak Canadian dollar. The company anticipates that more pipelines will be built, and President-elect Donald Trump has assured approval of the completion of a pipeline from the U.S. side.
Until then, rail service will suffice to keep transportation costs low.
Despite projecting a loss per share of 20 cents U.S. in 2016, earnings in 2017 are expected to increase to U.S. $1.20 along with a significant rise in cash flow. S&P’s 12-month target price for SU is U.S. $38 plus a dividend of $1.16 for a 2.7% yield.
See paragraph one for my technical view.