Randy Ollenberger, an analyst from BMO Capital, has initiated a new Hold rating on Strathcona Resources (SCR).
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Randy Ollenberger has given his Hold rating due to a combination of factors, including Strathcona Resources’ decision to terminate its takeover bid for MEG Energy and refocus on its organic growth plans. The company aims to achieve a strong growth rate among its peers, with a projected compound annual growth rate of approximately 9% from 2026 to 2029. Additionally, Strathcona plans to distribute a special dividend to shareholders from the proceeds of its Montney business sale, which will impact its net debt levels.
Despite these positive growth prospects, Ollenberger notes that Strathcona’s trading liquidity is limited due to a relatively small public float, which could hinder share price performance. The company’s current trading multiples are slightly higher than its large-cap peers, which may also contribute to the Hold rating. Overall, while Strathcona has a solid growth strategy and exposure to improving heavy oil prices, the limited liquidity and higher valuation multiples suggest a cautious approach for investors.
Based on the recent corporate insider activity of 19 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SCR in relation to earlier this year.