CNBC’s Jim Cramer on Friday recommended financiers to get shares of Canadian oil manufacturer Suncor Energy, however just if they’re positive oil rates will remain raised.
Cramer’s remarks followed activist financial investment company Elliott Management, which holds a 3.4% stake in Suncor, required the company to shuffle its management and take other steps to enhance its efficiency.
“I think Suncor’s future is less about this activist campaign and more about where the price of crude might be headed. If you think it’s going to stay elevated, this could be just an absolutely terrific stock because the oil sands can generate tremendous earnings growth,” the “Mad Money” host stated.
“However, undoubtedly, if you think oil will peak quickly and head meaningfully lower, this stock’s going to be a pet and it will not matter what modifications [Elliot Management] make,” he included.
Shares of Suncor fell 2.58% on Friday however reached a brand-new 52- week high previously in the day.
Elliott Management pointed out “missed production goals, high costs, and, tragically, a number of employee fatalities and other safety incidents” in its letter.
Suncor reacted to Elliott’s letter specifying it will examine the financial investment company’s suggestions.
“Whether you look at it from a financial perspective or a purely human perspective, this is not a well-run enterprise,” Cramer stated of Suncor’s performance history.
However, he stated he thinks the business has more space to run given that the cost of crude is up, indicating the business might end up being a high-performer if it takes Elliott’s urgings under factor to consider.
Brent unrefined futures settled at $10934 on Friday while U.S. West Texas Intermediate unrefined settled at $10469
“I think the stock jumped … yesterday because Wall Street’s confident Elliott can push Suncor’s board to unlock value,” Cramer stated. “Here’s some free advice to Suncor’s directors: Work with these guys.”
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