Cenovus Energy Inc. 2

I do not own this stock (TSX-CVE). Basically the Alberta Energy Company Ltd. (AEC) and PanCanadian Energy Corporation (PanCanadian) companies merged to form EnCana in 2001. EnCana split into EnCana and Cenovus in 2009.

When I look at insider trading, I find lots of insider selling (at $15.1M) and very little insider buying leaving a net ($15M) of insider selling. Everyone, but the directors have far more stock options than shares. Still, the CEO does have shares just under 100,000 valued at $3.3M. A few of the directors also have just over 100,000 shares.

There are some 529 institutions that own some 74% of this stock. They have marginally (less than 1%) reduced their holdings over the past 3 months.

I get 5 year median low Price/Earnings Ratios 10.18 and a 5 year median high P/E Ratio of 13.84. The current P/E of 18.39 would seem to be high. However, as with lots of other values on this company, the P/E Ratios can fluctuate a great deal. In 2009 and 2010, the P/E ratios never got lower than 18.7. In the years before 2010, P/E was a lot lower.

I get a current Graham Price of $21.82. The current stock price of $33.10 is some 52% higher. The 10 year median difference between the stock price and the Graham Price is the stock price being 25% higher. Here again the Graham Price does fluctuate and over the past two years, the difference between the Graham Price and stock price never got lower than 24%.

When I look at the Price/Book Value Ratio, I find that the current P/B Ratio of 2.82 higher than the 10 year median P/B Ratio of 2.04 by almost 40%. To show a good price, you would want the current P/B Ratio lower than the 10 year median Ratio.

The last thing to look at is the dividend yield. The 5 year median dividend yield is 2.76% and the current yield is 2.42%. This also shows a relatively high current stock price. So by all my measurements, the current stock price looks a bit high. It has been quite high over the past two years, but was a lot lower prior to 2010.

When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. Although there are a lot of analysts following this stock and a lot of Hold recommendations, the consensus recommendation would be a buy. A couple of analysts that give this a buy or strong buy recommendation say it is at a good price for a long term investment. One that gave a Hold recommendation thought it was fully priced (that is the price is too high).

There was a recent write-up on this company in Alberta Oil Magazine.

Tomorrow, I go on to talk about EnCana Corp. I will go on to talk about Ensign Energy Services and then Suncor Energy before wrapping up this section on Oil and Gas companies.

Cenovus Energy Inc. is an integrated oil company. The Company's operations include enhanced oil recovery (EOR) properties and established crude oil and natural gas production in Alberta and Saskatchewan. It also has ownership interests in two refineries in Illinois and Texas, United States. Its web site is here Cenovus. See my spreadsheet at cve.htm.

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 for stocks followed and investment notes. Follow me on twitter.