We recently published a list of 10 Cheapest Stocks to Buy On Robinhood. In this article, we are going to take a look at where Cenovus (NYSE:CVE) stands against other cheapest stocks to buy on Robinhood.
While the market has been on an upward trajectory for nearly two years now, the combination of seasonal trends, strong retail, and corporate activity, and positive market momentum following the November election still suggests a potential for continued growth in U.S. equities.
Goldman Sachs’ Scott Rubner predicts a year-end rally that will push the S&P to 6,200 points as reported by Bloomberg on November 25. He attributes this potential rally to growing retail enthusiasm in equities and crypto, seasonal trading patterns, and increasing corporate buyback demand.
Rubner noted that the recent consolidation phase is typical, and highlighted significant inflows into U.S. equities, with the broader market gaining over 3% since the November 5 presidential vote and the Russell 2000 rising 6.5%. Historically, strong market performance in election years tends to extend into January, with the capital being deployed at the start of the new year.
READ ALSO: Jim Cramer’s Lightning Round: 9 Stocks in Spotlight and 10 Best Renewable Energy Penny Stocks to Invest In.
Strategic Investment Moves in a Shifting Economy
In an interview with Seana Smith and Madison Mills of Yahoo Finance, Jim Smigiel, SEI’s Chief Investment Officer, highlighted several key insights for investors, in light of President-elect Donald Trump’s pro-growth policies. He warned that these policies could lead to higher inflation and rising interest rates, which may impact investment strategies. For investors, the focus should be on understanding how inflation and rates can affect different assets and staying prepared for potential shifts in the market.
Smigiel sees opportunities in small-cap stocks, value stocks, and financials, which are expected to benefit from the current reflationary environment. He suggested investors consider diversifying their portfolios to reduce reliance on highly concentrated growth sectors like tech. Active management, where professional fund managers select investments, could also be a useful strategy to broaden exposure and adapt to market changes.
While higher rates could eventually pose challenges, Smigiel noted that small-cap stocks remain attractive for now due to improved debt structures, providing a window of opportunity until around 2026. Investors should keep an eye on rising yields, as it might signal a need to shift toward more defensive investments. Diversification remains critical in managing risks during this period.
Our Methodology
For this article, we checked all the large-cap companies trading on Robinhood with at least 50% positive analyst ratings. We narrowed our list to nearly 40 stocks that were trading below a forward price-to-earnings multiple of under 15. We also skipped the stocks that were trading above or at their industry median despite trading below a PE ratio of 15. Finally, we chose the 10 cheapest stocks to buy based on their average analyst price target upside as of November 25 (pre-market open). These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A fleet of oil tankers at sea, representing the global reach of a crude oil supplier.
Cenovus Energy Inc. (NYSE:CVE)
Market Cap: $29.57 billion
FWD PE Ratio: 10.99
Average Price Target Upside: 36.62%
Cenovus Energy Inc. (NYSE:CVE) focuses on the development, production, refining, and marketing of crude oil, natural gas, and refined products. It operates through five segments: Oil Sands, Conventional, Offshore, Canadian Refining, and U.S. Refining. Key assets include oil sands projects in Alberta, natural gas operations in Western Canada, offshore activities in China and the East Coast of Canada, and refining facilities in Canada and the U.S.
In the third quarter of 2024, Cenovus (NYSE:CVE) demonstrated strong operational and financial performance despite a heavy maintenance period. Major turnarounds at upstream and downstream facilities were completed ahead of schedule, improving reliability for the remainder of the year and into 2025. Upstream production averaged 771,000 barrels of oil equivalent per day (BOE/day), with the oil sands segment delivering 586,000 barrels/day and an operating margin of $2.5 billion.
Early completion of maintenance at Christina Lake boosted production beyond forecasts by 15,000–20,000 barrels/day. The TMX pipeline, now fully operational, added global market access and contributed to a stable Western Canadian Select differential, which benefit Canadian oil prices. Offshore production remained stable at 66,000 BOE/day, with significant milestones achieved, including life-extension work on the SeaRose FPSO and continued progress on the West White Rose project, now 85% complete and set for first oil in 2026. Cenovus (NYSE:CVE) also returned a healthy amount of $1.1 billion through dividends and buybacks.
L1 Long Short Fund stated the following regarding Cenovus Energy Inc. (NYSE:CVE) in its Q3 2024 investor letter:
“Cenovus Energy Inc. (NYSE:CVE) (Long -15%) and MEG Energy (Long -13%) shares fell as the WTI oil price decreased 17% to ~US$69/bbl on the back of increased concerns around a potential increase in OPEC supply along with slower global economic growth. Despite OPEC delaying a previously planned increase in oil output, the oil price continued to weaken due to the weaker demand outlook. During the quarter, we attended the Peters & Co oil and gas conference in Toronto, meeting one on one with management from Cenovus and MEG Energy, along with the entire peer group. We continue to favour Cenovus and MEG in the sector due to their strong cash flow generation, the long -life nature of their oil sands assets, low cost of production and strong balance sheet s. Both Cenovus and MEG have now transitioned to returning 100% of free cash flow back to shareholders, having reached their respective net debt targets. As a result, we see both names offering sector leading shareholder returns, combined with some modest, accretive output growth.”
Overall, CVE ranks 9th on our list of cheapest stocks to buy on Robinhood. While we acknowledge the potential of CVE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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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Disclosure: None. This article is originally published at Insider Monkey.