CNQ: Adding Canadian Natural Resources to Investing Ideas (Long Side)

03/04/19 10:36AM EST

Below is a note written by CEO Keith McCullough on why we're adding Canadian Natural Resources (CNQ) to the long side of Investing Ideas today:

Long Energy (XLE) works in Quad 3 inasmuch as Long Canadian Energy via our favorite larger cap name (Canadian Natural Resources, CNQ) should. 

CNQ is down -5% today on an Old Wall note so I'll take that as a buying opportunity.

For those of you interested in learning more about Al Richards bullish long-term view of CNQ, he went bullish on it in our Best Ideas (Institutional Research) product back in December and here are the bullet points covered in his independent research presentation:

  • The evolution of oil sands mining operations and full-cycle costs 
  • The ability of Canadian E&Ps to withstand low WCS prices 
  • Oil Sands Mines vs. Shale Oil-Levered E&Ps – fundamental differences, cash flow profiles, full-cycle costs, & full-cycle free cash flows 
  • The disparity within North American oil-weighted E&P valuations 
  • What recent M&A activity demonstrates about the current market environment 
  • Causes of Canada’s oil takeaway issues and outlook for Alberta crude inventories 
  • Impact of IMO 2020 regulations on heavy oil 
  • The end of Canada’s explosive production growth cycle 
  • Why the odds of Keystone XL / Trans Mountain Expansion may not be as long as perceived 
  • Green shoots of an improving regulatory environment 
  • Valuation & Catalysts

Buy on red,

KM
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