UBS’ Best Stocks In The AI, Growth & Low Rates Era: Top 29 US Stocks

24. Suncor Energy (NYSE:SU)  

Number of Hedge Fund Investors In Q2 2024: 44

UBS’ Sector Rating: Neutral

Sector: Energy 208

Suncor Energy (NYSE:SU) is a sizeable Canada-based energy company with close to 15,000 employees. This makes it one of the biggest energy companies in North America. It is a diversified oil company with operations across the oil supply chain from production to refining and marketing. Its exposure to the oil and energy industry means that Suncor Energy’s (NYSE:SU) stock is at the mercy of economic activity and oil prices. Additionally, the firm also has to ensure oil product costs are kept under control and ensure it does not rely on excessive leverage to fund operations. Specifically for Suncor Energy (NYSE:SU), the firm is currently at the peak of a multi-year turnaround effort led by activist investor Elliot Management. It holds a $3 billion stake in the firm and has led to unique strategies at the firm such as autonomous large hauler trucks that reduce costs and improve safety.

Suncor Energy’s (NYSE:SU) management shared details about these trucks during the Q2 2024 earnings call. Here is what they said:

“I’ll move to a second area of targeted improvement, mining. Peter said it much more eloquently than I did on May 21 or than I will. But our mining strategy in a nutshell is fewer trucks, bigger trucks, autonomous trucks, operated better, maintained cheaper.

We’ve said before we have 55 new 400-ton trucks on order arriving and they will replace twice as many smaller, less efficient third-party trucks. The first 22 are in operation. That’s 6 more than our last call, 15 more will arrive at Fort Hills through November and the final 18 will be at base plant in the fourth quarter of this year and the first quarter of next year. Last week, I sat behind the wheel of one of these bad boys at Fort Hills and I got to tell you, I was ready to drive it into the mine, but sadly Peter concluded I wasn’t qualified. Recall in total, these 55 new trucks will lower our overall corporate break-even by saving more than $300 million a year in operating costs. We talked about autonomous previously. Our fleet conversion continues at base plant.”