CA - Enbridge: Market's Near-Term View Vs. The Long-Term View
2024-03-19 13:01:52 ET
Summary
- Enbridge is facing challenges and has lagged the overall market in recent months.
- Near-term challenges include depressed commodity prices and reduced mainline tolls, which could impact earnings in 2024.
- However, I view all these challenges as near-term.
- For the long term, I see a good pick fitting all of Graham’s criteria for a defensive stock.
- The stock is for sale either at a large valuation discount (by the Graham P/E) or close to fair value (by the Graham number).
Thesis
Enbridge Inc. ( ENB ) has lagged the overall market in recent months (see the next chart below), suffering a price correction of about 4% year-to-date. This article will explain why the market has good reasons for such a correction. My view is that all these reasons are temporary in nature. Thus, ENB now presents a compelling buying opportunity considering several factors in the long term. The price corrections, combined with stable fundamentals, potentially created an attractive entry point for long-term investors. In the remainder of this article, I will first analyze some of the key near-term challenges and then will elaborate on its long-term potential following Graham's frame for picking defensive stocks....
Enbridge: Market's Near-Term View Vs. The Long-Term View