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PETRO-CANADA $28 (Toronto symbol PCA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 484.6 million; Market cap: $13.6 billion; Price-to-sales ratio: 0.5; SI Rating: Average) has moved up from its low of $20 in November 2008, partly due to growing pressure from the Ontario Teachers’ Pension Plan, which now owns 3.3% of Petro-Canada’s shares.
Ottawa has capped the amount that any single individual can own at 20%, so it’s unlikely that Teachers’ will fully take Petro-Canada over. However, the pension fund will try to persuade the company to work to improve its stock price, possibly by selling its investments in politically risky countries like Libya and Syria. This would free up cash for more promising projects, including Petro-Canada’s Fort Hills oil-sands development.
Petro-Canada is a buy.
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