Cenovus Energy Inc. 2

On my other blog I am today writing about the presentation at the World Money Show in Toronto by Money Saver Magazine with Bruce Cappon.

I do not own this stock of Cenovus Energy Inc. (TSX-CVE, NYSE-CVE). This is another stock that was talked about at the 2010 Money Show in Toronto. There were those who liked oil companies and they mentioned both Suncor Energy Inc. (TSX-SU) and Cenovus Energy Inc. (TSX-CVE).

This company was split off from EnCana (TSX-ECA) in 2009. This was the oil part of EnCana and EnCana now is just a gas play. My spreadsheet reflects this split. I was also following Alberta Energy Co. (TSX-AEC) into EnCana. Also, between 2002 and 2008, the company was reporting in US$.

When I look at insider trading, I find $1M of insider buying and $3.3M of insider selling. Net insider selling is at $2.3M and only 0.01% of market cap and therefore a low amount. There is insider ownership with the CEO owing shares worth around $3.7M, the CFO owing shares worth around $1.1M, and officer owing shares worth around $3.4M and the Chairman owning shares worth around $3.7.

Outstanding shares were increased by 970,000 in 2013 for stock options. This is 0.13% of the outstanding shares and therefore a low amount. This book value of these shares was at $31M and this number of shares was worth some $29.5M at the end of 2013. (You can compare and contrast this with the same sort of information on CCL Industries where values were relatively much higher.)

The 5 year low, median and high median Price/Earnings per Share Ratios are 19.94, 24.54 and 29.14. The 10 year corresponding values were much lower at 12.47, 14.85 and 18.07. The current P/E Ratio is 15.06 based on a stock price of $28.62 and 2014 EPS estimate of $1.90. This stock price test suggests that the stock price is reasonable.

I get a Graham Price of $24.84. The 10 year low, median and high median Price/Graham Price Ratios are 1.08, 1.28 and 1.57. The current P/GP Ratio 1.15 based on a stock price of $28.62. This stock price test suggests that the stock price is reasonable.

The 10 year Price/Book Value per Share Ratio is 1.22. The current P/B Ratio is 2.01 based on a BVPS of $14.21 and a stock price of $28.62. The current P/B Ratio is some 9% lower than the 10 year P/B Ratio. This stock price test suggests that the stock price is reasonable.

The 5 year dividend yield is 2.76% and the current dividend yield at 3.72% is some 35% higher. I do not think that looking a historical dividend yields are appropriate because they cover EnCana not Cenovus. This stock price test suggests that the stock price is cheap.

Sound bit for Twitter and StockTwits is: Stock price is reasonable to cheap. See my spreadsheet at cve.htm. Note that there is a lot hidden in my spreadsheet, like US$ values and pre-2009 original values. Prior to 2009, reporting was in US$ and company was part of EnCana Otherwise the spreadsheet would look too confusing. However, I am willing to share my whole spreadsheet with anyone interested.

This is the second of two parts. The first part was posted on Wednesday, November 12, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

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.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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