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  5. ATH: On MarketCall, regarding oil sands companies, Eric Nuttall top picked MEG and Athabasca, while having some negative comments about Cenovus, particularly the negative EBITDA they are generating from... [Athabasca Oil Corporation]
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Investment Q&A

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Q: On MarketCall, regarding oil sands companies, Eric Nuttall top picked MEG and Athabasca, while having some negative comments about Cenovus, particularly the negative EBITDA they are generating from their refining business. Would you sell a position in CVE and buy ATH or MEG instead?
Asked by Dan on March 13, 2025
5i Research Answer:

CVE is significantly larger than both, and pays a higher dividend (no dividend on ATH). Thus, we think there would be a step up in risk with such a trade. CVE is very cheap at 7X earnings, and while it may have weakness in its refining business, its business is also more diversified. All three are cheap, and CVE has underperformed this year. We think rather than a straight swap we would sell 'some' CVE and add the others, to improve diversification and possible upside potential from the smaller companies.