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Elliott's $3B Stake Validates Confidence in Suncor's Transformation

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Elliott Investment Management has almost doubled its stake in Canada's premier integrated energy company, Suncor Energy Inc. (SU - Free Report) , validating its confidence in the company’s strategic transformation.

Overview of Elliot’s Investment in SU

Almost two years after instigating changes in Suncor’s management, board and strategic policies, Elliott Investment Management is now confident that the ongoing improvements in the company are capable of yielding higher returns. Therefore, it has almost doubled its stake in the company, from $1.6 billion to nearly $3 billion.

An Insight Into SU’s Performance Under Rich Kruger’s Leadership

After a major push by Elliott Investment in 2022, Suncor appointed Rich Kruger as the CEO, which has brought about dramatic changes in SU’s performance, resulting in improved company culture, safety practices and investor trust. Management has been praised for revitalizing the company’s safety records, which were previously flawed by more than a dozen fatalities. The company has achieved financial stability, resulting in a rise in stock price even during market downturns.

Elliott’s confidence is evident from the fact that SU’s stock price has gained more than 20% since January, outperforming the industry's growth of 8%.

Zacks Investment Research
Image Source: Zacks Investment Research

 

Elliott’s Role in Revitalizing SU

Elliott Investment has played a vital role in bringing about a meaningful change in SU and set an example for other activist investors. By focusing on management, safety and company strategies, it has brought about a sweeping turnaround in Suncor, which is now all prepared for success.

SU’s Zacks Rank and Key Picks

Headquartered in Canada, Suncor Energy’s operations include oil sands development and upgrading, conventional and offshore crude oil and gas production, petroleum refining and product marketing. Currently, SU has a Zacks Rank #5 (Strong Sell), with profitability coming under pressure from lower refining margins and higher capital spending.

Investors interested in the energy sector might look at some better-ranked stocks like Archrock, Inc. (AROC - Free Report) , Nine Energy Service, Inc. (NINE - Free Report) and Valaris Limited (VAL - Free Report) . While Archrock currently sports a Zacks Rank #1 (Strong Buy), Nine Energy and Valaris carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in the United States, Archrock is a provider of natural gas contract compression services and supplier of aftermarket services of compression equipment. The Zacks Consensus Estimate for AROC's 2024 earnings indicates 59.42% year-over-year growth.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. NINE’s expected EPS (earnings per share) growth rate for the current quarter is 23.08%, which compares favorably with the industry's growth rate of 6.14%.

London-based Valaris Limited provides offshore-drilling services across all water depths and geographies. The Zacks Consensus Estimate for VAL's 2024 earnings indicates 290.18% year-over-year growth.


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