As mentioned, in the Globe and mail article – Canadian Natural Resources Ltd (CNQ) seems to reflect improving and promising performance. However, it is important to note that the EVA is still negative, meaning CNQ is still not adding value to its shareholders and this is due to the company’s high cost for raising capital. Although that difference is decreasing (due to a greater increase in profits than an increase in capital costs), it is not yet eliminated, hence why CNQ is still risky (given by the 51% risk score seen on the Scorecard) and signals an overall neutral outlook.
On the other hand, for a more sustainable investment pick – lets look at Parex Resources (PXT). Apart from the reasons mentioned on the Globe and Mail article, PXT has an attractive scorecard. First, the positive outlook signal! This signal is due to the high score of 65% made up from a high-performance score and a low risk score. The stock rose by 7.24% as seen in the screener however it is still undervalued (this is given by the FGV and the P/IV graphs)