Stock Market Series

How Are Undervalued Canadian Mining and Energy Companies Performing (Part 2)?

In the last post, we had investigate whether some of Canadian undervalued mining and energy companies in my list have competitive advantage.   Today, we are going to continue on where we left off.

IAMGOLD Corporation (TSE:IMG) is engaged primarily in the exploration, development and production of mineral resources throughout the world.  The company has  approximately four operating gold mines on over three continents. In Canada, IAMGOLD owns the Westwood mine in Quebec and the Cote Gold project, a development project located in Ontario.

Here is the company’s financial statement analysis from 2013 to 2016 (click here if you need a refresher on accounting formulas):

Screen Shot 2017-11-30 at 10.45.58 PM

Unfortunately, I do not think I would invest in IAMGOLD at this moment because retained earnings have been negative since 2015.  In addition,  IAMGOLD has not been making money until 2016.  I am sure if the management has turned the company around into a financial sound business yet.

Pursing this further, Enerplus Corporation (TSE:ERF), established in 1986,  is an oil and natural gas company.  Enerplus’s oil and natural gas property interests are located in the United States, primarily in North Dakota, Montana, and Pennsylvania, as well as in western Canada in the provinces of Alberta, British Columbia and Saskatchewan.   The company’s oil and natural gas property interests contains gross reserves of approximately 14.3 million barrels of light and medium crude oil, 39.0 million barrels of heavy crude oil, 123million barrels of tight oil, 18.1 million barrels of natural gas liquids, 126.3 billion cubic feet (Bcf) of conventional natural gas and 1,002.8 Bcf of shale gas, for a total of approximately 382.5 million barrels of oil equivalent.

Here is the company’s financial statement analysis from 2013 to 2016:

Screen Shot 2017-11-30 at 11.23.16 PM

Likewise, I would not invest in Enerplus either due to the company’s negative retained earnings.

Lastly, Encana Corporation (TSE:ECA) is an energy producer that is focused on developing its multi-basin portfolio of natural gas, oil and natural gas liquids (NGLs) production as well as marketing and selling Encana’s products to customers.   In Canada, some of Encana’s operations are in Montney in northeast British Columbia and northwest Alberta and Duvernay in west central Alberta.

Here is the company’s financial statement analysis from 2013 to 2016:

Screen Shot 2017-11-30 at 11.53.16 PM

Similarly, I would not invest in Encana because retained earnings have been decreasing since 2015 and Encaca have been generating negative profits since 2015.

In fact, Encaca’s revenue has dropped drastically from $8,019 million U.S. in 2014 to $2,918 million U.S. in 2016.

Screen Shot 2017-11-30 at 11.57.29 PM

That is a drop of more than 50% in revenue in two years.

 

Ultimately, I would not invest in any of the companies we looked at above.  In the next post, we will finish off with the last three energy and mining companies: Whitecap Resources Incorporated, Teck Resources Limited, and Lundin Mining Corporation.

Please feel free to comment below! Catch you on the flip side!

 

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