Historically, the energy sector has always been out of favor, with a very low weight in core stock indices. Very similar to Real Estate (REIT) in the late 1990s, it remains hated by today's investors.
But this negative status for some is the birthplace of opportunities for others.
Those stocks in the sector with the highest potential are among the most neglected. Cenovus Energy shares perform better than the broader market this year, registering a growth of 27.9%. The same, however, drops by -25.1% on January 1, 2016 - evidence will be underestimated.
The focus on the energy sector continues to rise, with companies in it being swept away by relative and absolute figures from 2016 onwards. On this occasion, we need to pay attention to Cenovus Energy. Using a discounted cash flow analysis as well as financial modeling, the long-term value per share is about $ 25, well above the current close to $ 12. This may seem like a too positive forecast, but a quick look at the graph shows that the stock was traded at around $ 15 for most of 2015 and 2016 when oil prices were low.
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