7 Cheap Canadian Stocks To Invest In

1. Cenovus Energy (NYSE:CVE)  

Upside Potential: 39.70%  

Forward P/E Ratio as of September 28: 9.00

Number of Hedge Fund Investors: 46

Cenovus Energy (NYSE:CVE) is a Canadian oil company focusing on oil sand production and refining. The company owns a diverse asset base that spans Western Canada, the United States, and other international locations. Cenovus Energy (NYSE:CVE) operations include conventional oil and gas fields, oil sands, and a refining segment, which comprises two refineries in the United States.

In Q2, Cenovus Energy (NYSE:CVE) delivered a production beat, producing 800,800 barrels of oil equivalent per day, exceeding consensus expectations. The company also upgraded its guidance for downstream performance for the second half of the year. This positive outlook is further enhanced by the company’s high free cash flow yield, which is significantly higher than its peers.

Cenovus Energy (NYSE:CVE) has achieved its net debt target of $4.0 billion and is now shifting its focus towards returning value to shareholders. As part of this strategy, the company will allocate 100% of its excess free cash flow towards share repurchases, which will not only reduce its share count but also increase earnings per share. This move is expected to create long-term value for investors.

Cenovus Energy (NYSE:CVE) presents an attractive investment opportunity for those seeking a high-quality energy company with strong growth prospects. The company’s stock is trading at a forward PE of 9, a 19.79% discount to its sector median of 11.22. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $24.36, which represents a 39.4% upside potential from its current level.  In the second quarter, Cenovus Energy’s (NYSE:CVE) stock was held by 46 hedge funds with stakes worth $1.21 billion.

While we acknowledge the potential of Cenovus Energy (NYSE:CVE) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CVE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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