Bloomberg TV Analyzes Suncor’s (SU) String of Acquisitions
NEW YORK (TheStreet) -- Calgary-based Suncor Energy (SU) - Get Report has become the largest acquirer of oil companies in the world over the past year, Bloomberg TV's Shery Ahn reported this afternoon on "Bloomberg Markets."
The company's acquisition rate has surpassed that of PetroChina (PTR) and Total (TOT). Suncor is Berkshire Hathaway's (BRK.A, BRK.B) Warren Buffett's largest play on oil.
"Over the course of the last year $6 billion is what Suncor has put to work to buy up different companies," Bloomberg TV Canada anchor Pamela Ritchie said on "Bloomberg Markets." "Suncor is the thirteenth largest integrated oil company in the world, that's by market value."
From early on the company has been taking advantage of a "distressed environment," Ritchie added. Company CEO Steve Williams went into the 2014 oil price downturn with some dry powder on hand and put it to work.
Williams was able to use a combination of stock and cash to go into the market, the company acquired the Canadian oil sands. Suncor purchased Total's stake in a project in Alberta and Murphy Oil's (MUR) 5% stake in the Syncrude mine, increasing its own stake.
Bloomberg TV anchor Matt Miller questioned Ritchie on whether or not Suncor will continue making acquisitions.
"First of all they have to make sure that they are cost cutting, as well as their divestiture program and a few other ways to shore up capital, equities raises, they've done some of them they may have to do more," she said.
Ritchie pointed out that some analysts are noting there are less options out there in terms of acquisitions.
Suncor's cash position is depleted following all of these acquisitions, but the company has been successful with equity raises and may have to go back to that in order to "sustain themselves," Ritchie said.
Shares of Suncor are down by 1.53% to $27.68 on the NYSE this afternoon, the stock is trading lower by 1.02% on the Toronto Stock Exchange.
Separately, TheStreet Ratings has set a "sell" rating and a score of D+ on Suncor Energy stock. This is driven by a few notable weaknesses, which TheStreet Ratings believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers.
The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and disappointing return on equity.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: SU