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Cenovus Energy Inc. (CVE)
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MEG Energy Corp. (MEG)
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Freehold Royalties Ltd. (FRU)
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Tamarack Valley Energy Ltd. (TVE)
Q: Good morning,
I currently own all four companies in the energy portion of my family portfolio.
That being said, I'm in the red and very disappointed with FRU.CA's performance of late and looking at selling FRU.CA and with the proceeds, adding to my existing positions of MEG.CA, CVE.CA or TVE.CA.
Q1. What are your thoughts on FRU.CA
Q2. Which of these three stocks (MEG.CA, CVE.CA or TVE.CA offers the best risk/reward at this particular time,
Q3. Is there another energy stock that you prefer and would wholeheartedly recommend.
Thank you and I'll await your response.
I currently own all four companies in the energy portion of my family portfolio.
That being said, I'm in the red and very disappointed with FRU.CA's performance of late and looking at selling FRU.CA and with the proceeds, adding to my existing positions of MEG.CA, CVE.CA or TVE.CA.
Q1. What are your thoughts on FRU.CA
Q2. Which of these three stocks (MEG.CA, CVE.CA or TVE.CA offers the best risk/reward at this particular time,
Q3. Is there another energy stock that you prefer and would wholeheartedly recommend.
Thank you and I'll await your response.
5i Research Answer:
We are 'OK' with FRU. The balance sheet is strong and growth is expected in 2024 after a dip this year. We do not think the company has done much 'wrong' but it is more expensive than many in the sector, and this may be holding back the share price. MEG is showing the best momentum, by far, and is cheap. TVE offers a dividend and more upside, probably, but is not acting well and will carry more risk. We think a combo of TVE/MEG could work well. In a cyclical industry, we might prefer TOU for its management team, or SU for its integrated operations, which are generally less risky than a pure producer. CNQ also for large cap exposure.