Thursday, May 14, 2009

EnCana Corp 2

I am continuing my review on this stock (TSX-CNR) today. I bought it to help me keep track of Canada’s resource stock. After all, resource stocks are a large part of the TSX. This is a large and well respected Canadian Oil company that is widely owned and traded, not only on the TSX, but also on the NYSE. The NYSE symbol is also ECA.

First, I looked at Insider Selling and Buying. There is net selling of some 9m of this stock, which is .02% of the outstanding shares of this stock. It all seems to be mostly options, but the outstanding share held by directors has decreased somewhat over the last year.

The current yield at just over 3% is greater than the 5 year average 1.3% and is also higher than it has been for some time. If you look at the P/E current at 5.9%, it is lower than even the 5 year low average of 7.3 and of course, lower than the 5 year average on close of 9.8. However, if earnings are going to drop as expected by all the analysts I look at, then the P/E ratio will climb higher.

When you look the Graham Price, you get the same thing. The Graham Price is influence by the book value and the earnings. If the earnings drop off considerably, then the Graham Price will also fall. Currently, the Graham price is some 37% higher than the stock price. However, if the earnings fall as expected, then the stock price will be very close the Graham Price. This will still make this stock price a good price, because the Graham Price, is considered a good price.

There are a number of analysts following this stock. Ratings are from Strong Buy to Hold, with the consensus rating being a Buy. There are no ratings lower than a Hold that I can find. (See my site for information on analyst ratings.) If you look at the estimates, there is a big range when it comes to earnings and a much smaller range for Cash Flow.

When looking at the charts, once you get beyond three years, this company has done much better than the TSX and the Energy Index. On charts for shorter periods than 1 year, this company has done as well as the TSX and better than the Energy Index.

As I said yesterday, I intend to hold this stock for now. However, I just have 100 shares, so this will not affect my portfolio at all, no matter what it does. It will help me keep an eye on energy stocks.

This company is involved in the acquisition, exploration and development of natural gas, crude oil and natural gas liquids. It is a merger of Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies. It is a world-class independent oil and gas company. Its web site is See my spreadsheet at

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets.

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