Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 13 Jun, 25 | SCR | Buy | CAD 32.87 | CAD 34.5 | CAD 35.5 | 17 days | Closed |
7.82%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Strathcona Resources Ltd. acquires, explores, develops, and produces petroleum and natural gas reserves in Canada. It operates through three segments: Cold Lake, Lloydminster, and Montney segments. The Cold Lake Thermal segment includes three producing assets in the Cold Lake region of Northern Alberta; and Lindbergh, Orion, and Tucker. The Lloydminster Heavy Oil segment has multiple oil-in-place reservoirs accessed through enhanced oil recovery techniques and thermal steam-assisted gravity drainage located in Southwest Saskatchewan. The Montney segment includes assets in the Northwest Alberta Kakwa region; Grande Prairie regions; and the Northeast British Columbia Groundbirch region. The company was incorporated in 2009 and is headquartered in Calgary, Canada.
Higher Net Margin: 15.4% in Q1 2025 vs 11.3% of Industry Median
Higher Operating Margin: 28.1% in Q1 2025 vs 24.2% of Industry Median
Higher Cash Cycle Days: 30.4 Days in Q1 2025 vs 1.4 Days of Industry Median
Higher Debt to Equity Ratio: 0.54x in Q1 2025 vs 0.42x of Industry Median
Volatility in the commodity price, Regulatory risks, Trade tariffs, Inflationary pressures, Lower cash flows, etc
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 32.87 | 30.3 | 34.5 | 35.5 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Rising Production and Sales Volume: In the three months ending March 31, 2025, production volumes scaled by 5% (or 9,487 boe per day) to an average of 194,609 boe per day, up from 185,122 boe per day in 2024. The rise was driven mostly by new wells brought online in the Cold Lake sector, as well as improved runtimes and new wells in the Montney segment. The sales volume also stood higher at 194,884 boe/d in Q1 2025, against 182,862 boe/d in pcp.
Healthy Financials: The company witnessed healthy financial numbers in Q1 2025, where its net sales increased by almost 10.2% to CAD 1,251.3 million compared to CAD 1,135.0 million in pcp. The rise in sales was mainly due to higher production and sales volumes and elevated realized prices. The net income also improved by 104.1% to CAD 205.3 million against CAD 100.6 million in pcp.
Decent Cash Flows: The company reported higher Funds from operations, which increased to CAD 516.9 million in Q1 2025, compared to CAD 408.8 million in Q1 2024. Moreover for the same reported period, its free cash flow rose to CAD 184.0 million from CAD 157.9 million. This improvement was driven by higher production & sales volumes, elevated realized prices, and lower interest and financing cost.
Considering the expected valuation upside, favorable product mix, continued natural gas demand for AI driven data centres in North America, rising cash flows, current trading levels and key business risks, a ‘Buy’ recommendation has been given on the stock at the last closing price of CAD 32.87, as on June 12, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas E&P
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| SCR Strathcona Resources Ltd. |
-0.12 0.40% | 29.88 | 9.24 | 9.78 | 1.34 | 1.10 | 1.66 | 7.96 |
| CNQ Canadian Natural Resources Ltd |
0.17 0.39% | 43.96 | 12.15 | 13.97 | 2.36 | 2.28 | 2.45 | 6.25 |
| TOU Tourmaline Oil Corp. |
0.04 0.06% | 63.62 | 19.30 | 12.15 | 5.67 | 1.59 | 4.25 | 7.63 |
| ARX ARC Resources Ltd. |
-0.06 0.22% | 27.74 | 13.14 | 10.60 | 3.23 | 2.16 | 3.27 | 6.03 |
| OVV Ovintiv Inc |
-0.12 0.22% | 54.23 | 16.38 | 7.50 | 1.54 | 0.99 | 1.83 | 4.93 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is June 12, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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