SU - Suncor

[uncommonprofits]

Suncor was up almost 25% today.  This one day rally seems to have outperformed most (if not all) majors whether integrated, midstream, upstream or downstream (natural gas pure-plays included).  Perhaps the market is catching on as to how undervalued Suncor is; or is it a more optimistic take on SU’s greener initiatives (maybe even Hydrogen) considering the new presidency?

 

Suncor (and other oilsands players) are sitting on massive potential if/when Hydrogen moves forward.  The new presidency could be the catalyst.  If something on this file passes through Congress - I would expect the Canadian government to follow suit (regardless who is in power here).  With all the infrastructure required, this would be a very positive dose of stimulation on both sides of the border.  Even the present right leaning Alberta government is starting to catch on to this Hydrogen potential - and calling on Ottawa to supercharge a national strategy.  Obviously not in play yet - but the odds of an accelerated hydrogen strategy perhaps increased over the weekend somewhat?     

 

Bottom line is Suncor pretty much has all sides of the energy puzzle covered.  Even electricity. Once complete in a couple years, their 800 MW co-gen project is forecast to produce about 8% of Alberta’s power (further displacing coal).  Combined with SU’s renewables, this should leap-frog them into the #1 electricity producer in Alberta.  The recent market pricing hasn’t been reflecting this either.  Nice to see a double or triple dose of reality today - but it’s still very cheap in my opinion.