The Canadian stocks we’ve identified have experience the most severe selling but could represent the best value
SmallCapPower | March 24, 2020: Global stock markets have sold off severely during the past month following the spread of the coronavirus (COVID-19). In Canada, the S&P/TSX Composite Index has lost about one third of its value since reaching an all-time high on February 20, 2020. TSX sectors experiencing the greatest amount of selling include Energy, Consumer Discretionary, and Health Care. Today we have sifted through and found four Canadian stocks that have lost the most during the recent selloff, but could represent the best value.
*Returns are based on closing stock prices as of March 20, 2020
Shawcor Ltd. (TSX:SCL) – $1.23
Shawcor is a global energy services company specializing in technology-based products and services for the upstream, midstream and downstream sectors, as well as other industrial markets. Shawcor has become an integrated services company, operating more than 100 manufacturing and service facilities in 25 countries throughout the world. The Company services various sectors of the Infrastructure, Energy and Transportation markets through three reporting segments: Pipeline and Pipe Services, Composite Systems and Automotive and Industrial. On March 16, 2020, Shawcor said it will suspend the regular quarterly dividend until further notice, beginning in the second quarter, which is expected to save the Company more than $40 million annually.
- 1-Month Return: – 86%
- 12-Month Return: – 94%
Vermilion Energy Inc. (TSX:VET) – $3.10
Vermilion Energy is an international energy producer creating value through the acquisition, exploration, development and optimization of producing properties in North America, Europe and Australia. The Company is targeting growth in production primarily through the exploitation of light oil and liquids-rich natural gas conventional resource plays in Canada and the United States, the exploration and development of natural gas opportunities in the Netherlands and Germany, and through oil drilling and workover programs in France and Australia. Vermilion also holds a 20% working interest in the Corrib gas field in Ireland. On March 16, 2020, Vermilion Energy it will reduce its 2020 capital budget to $350 million to $370 million and expects to deliver 2020 annual production of 94,000 boe/d to 98,000 boe/d, while slashing its monthly dividend from C$0.115 per share to $0.02 per share.
- 1-Month Return: – 82%
- 12-Month Return: – 90%
Whitecap Resources Inc. (TSX:WCP) – $0.90
Whitecap Resources is an oil-weighted growth company focused on profitable production growth. The Company said its light oil focus drives the highest funds flow netbacks relative to other commodities. On March 17, 2020, Whitecap announced that it will cut its 2020 capital spending by about 44% to $200 million to $210 million, while reducing its monthly dividend per share from C$0.0285 to $0.01425.
- 1-Month Return: – 80%
- 12-Month Return: – 79%
Cenovus Energy Inc. (TSX:CVE) – $2.39
Cenovus Energy is a Canadian integrated oil and natural gas company with 50% ownership in two U.S. refineries. The Company’s large weigh on more expensive heavy oil (oilsands) production makes it particularly vulnerable in a falling oil price environment. On March 10, 2020, Cenovus said it is reducing its 2020 capital spending by approximately 32%, adding that it currently has liquidity of approximately $4.4 billion.
- 1-Month Return: – 79%
- 12-Month Return: – 79%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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