Berkshire Hathaway Inc decided to re-invest in Suncor Energy Inc, and this showed all the benefits of being part of an oil company that could revive the investor interest in the Canadian energy sector. This move is seen by many people as a bet on the energy sector, that could make the most out of a change in the guard in the Alberta province, which, as you might already know, also has an election this year.
What this means for Berkshire in money?
Berkshire has 0.7% stake in Suncor, which has a value of $370.54 million, and, at the current prices, it already has 23% more ever since Berkshire bought it – this happened in the last quarter. This comes at about two years after it got sold for $618 million, with a 1.4% stake bought from 2013, and then added to 2015.
This re-entry is basically seen as some kind of validation of the fact that Canada’s biggest oil and gas company has promoters, like the new CEO coming from the removal of Alberta oil curtailments. This thing can push the stock even higher.
Berkshire didn’t want to discuss publicly the reasons why they invested in Suncor, and when Reuters reached out for comment, they didn’t respond.
It’s true, Suncor is not really seen as a bad thing for the entire industry. However, major Berkshire shareholder, Warren Buffett’s stature, which is seen as a valued investor is expected to show the other funds that went into the Canadian energy sector. People are usually very careful when Warren Buffett does something like this, and probably things will not be different now. It is a huge thing that foreign capital is finding its way back to Canada as being the main driver of stock prices.
Meagan Kozlovs is a reporter for Debate Report. She’s worked and interned at Global News Toronto and CHECX. Megan is based in Toronto and covers issues affecting her city. In addition to her severe milk shake addiction, she’s a Netflix enthusiast, a red wine drinker, and a voracious reader.