Kaminsky's Call: Ultimate Long-Term Canadian Stock
Morgan Stanley, Vice Chairman
Every member of the K-Call's "One-Decision Club" has special meaning. How often do you feel strongly enough to buy a stock without thinking of selling for years to come?
Expeditors International of Washington, Clorox, Ecolab, and Brookfield Asset Management have all been given the nod on this page, and I am excited to monitor all of them with you.
But this next inductee stands out for a variety of reasons.
My "Call-to-Action" is to bring back the ultimate "one-decision stock" of my career in the Canadian energy success story, Suncor Energy.
First, some history to explain why this is synthetically a second-time admission into the club. I saw something special in the crude oil company in 1994 during my days at Cowen, when Suncor's market cap stood at approximately $500 million.
Today's number? $50 billion. From 1994-2008, Suncor went from a $2 stock to a peak of $80 after several splits. Organic growth without issuing equity was the wildly successful formula as the price rose and rose.
It would not have sufficed to call Suncor the ultimate growth stock. It was the crème-de-la-crème. I took multiple trips to Fort McMurray and Calgary. I held the oil sands in my hands. But most importantly, my host was the 1999 Canadian CEO of the year, Rick George. In all my years of managing money, I never met a more dynamic leader than Mr. George.
Suncor Energy 10-Year Chart:
Loyal Squawk Box viewers might recall my appearances years ago when I discussed the stock with regularity. When it made its most dramatic moves, short-term oil players jumped at the chance to dish it. In mid-2008, when oil spiked to $150/barrel, the great production growth had massive costs. Those coldly trading Suncor as just another ticker pushed the stock down from eighty to twenty (compounded by the fall that was autumn, 2008).
This volatility is not characteristic of "one-decision club" members and the growth relished for over fifteen years had been discarded.
So when I created this exclusive club, my heart wanted to anoint Suncor first. But I wanted to make sure that the short-term players were out of the name. With the belief that shareholders are now in Suncor for the long-term, the time has come. Again.
Rick George, who has been at his post since 1991, is still the man to oversee the production growth, essentially without exploration risk. Think of the long term value as you would when analyzing a zero coupon bond.
The best part for fans of The Strategy Session is you can tune in on September 16th when Mr. George makes a most rare television appearance on our program. By then, this new member of the "One-Decision Club," will have had a little over a month to perform.
But the beauty is, that month will be merely a grain of sand in time when following the guidelines of the "One-Decision Club." Welcome to the club, Suncor. Again.
- Suncor Energy Quarterly Earnings Trends
Programming note: "The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.
Gary Kaminsky does not hold any equity positions.
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