Suncor Energy Stock Climbs 13% On A 7-Day Winning Streak

A sustained run in Suncor Energy stock has investors looking closer at the fundamental story behind the momentum.

Suncor Energy (SU) stock has gained 13% over its current winning streak, which has now lasted for 7 consecutive trading days. That run has added about $8.9 billion to the company's market value, bringing its total to about $80 billion.

For anyone holding the stock, the move has helped offset recent weakness; the shares posted a -2.3% return over the trailing three months, even with this recent climb.

The Streak Next To The S&P 500

Here is how SU stock stacks up against the S&P 500 over the streak and the periods around it:

Do the fundamentals support this run?

The move appears to be specific to the company, as the S&P 500 returned -0.8% over the same 7 trading days. The market may be weighing a set of fundamentals that stand out against broader index medians. Suncor's revenue over the last twelve months grew 13.2%, ahead of the S&P 500 median of 8.4%.

Its operating margin is also higher at 20.4%, versus the 18.4% median for the index. The stock trades at a price-to-earnings multiple of 8.9, a notable discount to the S&P 500 median of 23.2.

How should an investor think about a streak?

A streak is a signal of sustained attention and momentum, but it is not a trading instruction. All such runs end, often without warning. The disciplined approach is to use the new attention as a reason to check the underlying business against the stock's new price.

The data here offers a starting point for that work, framing the stock's recent +80.2% return over the trailing twelve months against its current valuation and growth metrics.

If you are hunting for strength that has more behind it than a hot tape, our Guidance Momentum screen surfaces the names where management raised its own outlook, which is the kind of momentum that tends to persist.

And for anyone who would rather back the theme than one company's story, an oil and gas ETF like XOP holds the sector rather than this one name. It is still a concentrated bet on that one theme, though, which is exactly the gap the portfolio below closes.

One Hot Stock Is A Story. Thirty Sound Ones Are A Strategy

A streak like this earns a place on your watchlist, and it also earns a question: how much of your outcome do you want depending on one company keeping this up?

The Trefis High Quality (HQ) Portfolio answers it with breadth: roughly 30 businesses picked for consistent cash generation, strong margins, and balance-sheet strength, sized and rebalanced by rules. It has a track record of outpacing a benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000. Follow the story; invest in the strategy.