Two years after first pressing for changes at Canada’s Suncor Energy SU-T, Elliott Investment Management is so convinced that ongoing improvements will yield a higher share price that it has nearly doubled the size of its investment.
Elliott now owns a stake of nearly $3-billion in the company, up from the $1.6-billion stake, or around 3.4 pct, it owned in 2022 when it pushed the company to refresh the board, overhaul management and begin a strategic review, Elliott portfolio manager Mike Tomkins said on Tuesday at the 13D Monitor Active-Passive Investor Summit.
Soon after Elliott arrived the company installed a new chief executive, Rich Kruger, who has helped improve the company’s safety record after more than a dozen deaths and improve performance.
Tomkins called Kruger and his management team “rockstars” and said that the CEO has helped change the company’s culture so dramatically that investors who had fled are now returning.
But Tomkins noted that the stock price, even though it has gained 22 per cent since January, has not re-rated.
“This does not surprise us,” Tomkins said, adding that “these turnaround stories take a while to actually roll into the stock price.”
He remains convinced that the stock price will continue to climb.
“This is an example where we think over a multi-year period there is significant upside,” he said.