Major Activist Investor Sees 50% Upside in This Canadian Oil Giant
A gain of 68% over the course of the past year is the type of return investors would normally be thrilled about. The problem for Canadian oil giant Suncor Energy (NYSE: SU) is that this return, while impressive, lags those of its peers like Canadian Natural Resources and Cenovus, which have posted gains of 104% and 138%, respectively, over the same time frame.
Image source: Getty Images.
This gap has attracted the attention of activist investor Elliott Management, which has taken a 3.7% stake in the company . Elliott is a large hedge fund (with over $50 billion in assets under management) that is known for getting involved in companies that it feels are underperforming and pushing for changes. Elliott is calling for the appointment of five new independent directors; asking Suncor to consider selling assets, such as its Petro-Canada gas stations; and increasing its returns to shareholders by increasing them from 50% of discretionary cash flow to 80%. Elliott thinks that shares of Suncor could be worth 65% more than where they are currently priced.
Source Fool.com
