7 Undervalued Canadian Stocks To Buy According To Hedge Funds

2. Cenovus Energy (NYSE:CVE) 

Number of Hedge Fund Investors: 46  

Forward P/E Ratio as of September 25: 9.51  

Cenovus Energy (NYSE:CVE) is a Canadian oil and natural gas production that is engaged in the exploration, development, and production of crude oil and natural gas in Western Canada, the United States, and other international locations. Cenovus Energy (NYSE:CVE) has a diverse asset base, including conventional oil and gas fields, oil sands operations, and a refining segment. The company’s refining segment includes two refineries in the United States.

In Q2, Cenovus Energy (NYSE:CVE) produced 800,800 barrels of oil equivalent per day, ahead of consensus expectations. The company also upgraded its guidance for downstream performance, which suggests that Cenovus Energy (NYSE:CVE) is poised for a strong second half of the year. The company’s free cash flow yield is significantly higher than its peers, and it is using it to focus on production and its refining segment, which provides a stable source of cash flow and will enable the company to return value to shareholders through share buybacks.

Cenovus Energy (NYSE:CVE) has achieved its net debt target of $4.0 billion and is now focused on returning value to shareholders through share buybacks. The company has announced that it will allocate 100% of its excess free cash flow towards share repurchases, which will help to reduce its share count and increase its earnings per share.

Cenovus Energy (NYSE:CVE) is an attractive investment opportunity for investors looking for a high-quality energy company with strong growth prospects. The company’s stock is trading at a forward PE of 9.51, a 17.14% 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 $24.67, representing a 34.78% upside potential from its current level. Analysts expect the company to increase its earnings by almost 15% this year. As of the second quarter, the stock is held by 46 hedge funds, and the stakes amount to $1.21 billion. Millennium Management is the largest shareholder in the company and owns stocks worth 297.46 million.