7 Undervalued Canadian Stocks To Buy According To Hedge Funds

5. Imperial Oil (NYSE:IMO)  

Number of Hedge Fund Investors: 18  

Forward P/E Ratio as of September 25: 10.86  

Imperial Oil (NYSE:IMO) is one of Canada’s largest integrated oil companies, with operations in exploration, production, refining, and petroleum product distribution. The company is a majority-owned subsidiary of ExxonMobil and plays a significant role in Canada’s energy industry, especially in the oil sands sector.

In May, Imperial Oil’s (NYSE:IMO) Grand Rapid project started producing oil at its Cold Lake site in Alberta using solvent-assisted technology. This new technology reduces greenhouse gas emissions by up to 40%, a big step towards the company’s goal of reducing its oil sands emissions by 30% by 2030. The project is expected to produce 15,000 barrels of oil per day. Additionally, the company is expanding its Cold Lake oil sands facility with the Leming redevelopment, which will start in 2025. Once fully operational, the project will increase production by 9,000 barrels per day and produce 20,000 barrels per day of diesel.

Imperial Oil’s (NYSE:IMO) strong production growth and innovative projects position it for long-term success. The company’s stock is trading at a forward PE of 10.86, a 5.42% discount to its sector median of 11.48. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $74.39, which represents an almost 4% upside potential from its current levels. Analysts expect the company to increase its earnings by almost 4% this year. As of the second quarter, Imperial Oil’s (NYSE:IMO) stock is held by 18 hedge funds with stakes worth $76.36 million.