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Integrated Energy Stocks’ Returns in 3Q17: Here Are the Top 10

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Part 4
Integrated Energy Stocks’ Returns in 3Q17: Here Are the Top 10 PART 4 OF 11

Suncor’s 50-DMA Crosses over Its 200-DMA

Suncor stock’s performance in 3Q17

Suncor Energy (SU) stock stands third among the ten stocks in our survey. Suncor is the last stock in the list’s top tier. The first two stocks are Petrobras (PBR) and Statoil (STO). Let’s have a look at Suncor stock’s performance.

Suncor stock has risen 16.3% since July 3, 2017, outperforming the broad market indicator, the SPDR S&P 500 ETF (SPY). This ETF has risen 3.3% in the same period.

Suncor’s 50-DMA Crosses over Its 200-DMA

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Suncor’s moving averages

In 3Q17, Suncor’s 50-day moving average (or 50-DMA) has crossed over its 200-day moving average (or 200-DMA), which is a positive technical indicator. SU’s 50-DMA stood 0.1% below its 200-DMA on July 3, 2017, and now stands 1.0% above its 200-DMA.

However, SU’s 50-DMA stands marginally above its 200-DMA. In such a situation, if oil prices fall or if the company faces any negative news, then SU’s 50-DMA can easily break below its 200-DMA and move Suncor stock to a bearish zone. For improved future returns, SU’s 50-DMA could either maintain or widen its gap from the 200-DMA.

Why Suncor stock rose

Suncor stock’s correlation coefficient versus WTI for the past one-year period stood at 0.67, implying a strong positive correlation. WTI prices rose 8.4% in 3Q17, which could have supported Suncor stock.

Also, Suncor posted a great set of 1H17 numbers. Suncor posted positive net earnings compared to a loss in 1H16. This improvement was due to an across-the-board rise in net segmental earnings. Its E&P (Exploration and Production) segment’s net earnings increased from a loss in 1H16 to $354 million Canadian (or ~$283 million). This increase was due to a steep rise in oil prices.

Brent crude rose 30% over 1H16 to $52 per barrel in 1H17. Suncor’s hydrocarbon production also increased. The company’s Oil Sands segment’s net earnings rose from a loss in 1H16 to a profit in 1H17. Suncor also witnessed a 26% year-over-year rise in net refining earnings in 1H17.

In the next part, we’ll look at Chevron’s (CVX) stock returns in 3Q17.

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