Stock of the Day

October 7, 2020

Canadian Natural Resources (CNQ)

$29.98
-$0.76 (-2.5%)
Market Cap: $64.59B

About Canadian Natural Resources

Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company's midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.

Canadian Natural Resources Bull Case

Here are some ways that investors could benefit from investing in Canadian Natural Resources Limited:

  • The current stock price is $30.02, which may present a buying opportunity for investors looking for value in the oil and gas sector.
  • Canadian Natural Resources Limited has a strong market capitalization of approximately $63.14 billion, indicating a solid position in the industry and potential for growth.
  • The company has a relatively low debt-to-equity ratio of 0.21, suggesting financial stability and lower risk associated with debt financing.
  • Recent institutional investments, such as Yousif Capital Management LLC increasing its stake by 56.3%, indicate growing confidence among institutional investors in the company's future performance.
  • With a P/E ratio of 11.66, the stock may be considered undervalued compared to industry peers, potentially offering a good entry point for investors.

Canadian Natural Resources Bear Case

Investors should be bearish about investing in Canadian Natural Resources Limited for these reasons:

  • Despite recent positive movements, the stock has experienced volatility, with a 1-year high of $41.29 and a low of $28.65, indicating potential risks in price fluctuations.
  • Analysts have recently downgraded the stock from a "strong-buy" to a "hold" rating, suggesting that the stock may not have significant upside potential in the near term.
  • The company has a quick ratio of 0.53, which is below 1, indicating potential liquidity issues that could affect its ability to meet short-term obligations.
  • With 74.03% of the stock owned by institutional investors, there may be less room for retail investors to influence the stock's performance.
  • Market conditions for oil and gas can be unpredictable, and any downturn in commodity prices could adversely affect the company's profitability.