Suncor Energy's Turnaround Is Paying Off

Editor's Note: Sorry Jon, I'm stealing the "idea" spotlight on this one.

Wow, it's been nearly 2.5 years in the making. The last time I wrote an "idea" article was when Elliot took an activist position in Suncor. You can read the write-up here.

Since then, Suncor has made material changes with Elliot winning 3 board seats, and the subsequent hiring of Rich Kruger, formerly the CEO at Imperial Oil. The hiring of Rich Kruger might come down in the Canadian energy patch as one of the greatest hires in history. Speaking as a fellow energy company insider, changing the corporate culture is incredibly difficult if not impossible, and to do it at the size Suncor is at is almost unheard of. The market was initially optimistic about the hiring, but it wanted to see results, and I think that day is finally here.

Following the Q3 earnings Suncor announced last night, every conceivable benchmark for operational outperformance was beaten. Suncor has always had an amazing downstream operation with record-setting utilization, and the upstream side of the business was always a big head-scratcher. That's no longer the case. After steadily outperforming analyst expectations for a year straight, I think we can finally say that the Suncor turnaround is real, and this is our favorite large-cap energy name to own for years to come.