Stock Spin-offs are a good place to make money, right?  They have been reported to be for some time, but does that continue to be true? . . .  in different sectors?  . . . when the spin-offs are for different reasons?

An article on Investopedia has looked at the fate of spin-offs in the energy industry that have occurred in the last year with an eye to just such questions.

They look at Cenovus (CVE), EnCana (ECA), QEP Resources (QEP), and Questar, (STR).

It’s short and doesn’t provide any definitive answers, but it may provide some food for thought.

Tags: Cenova, CVE, ECA, Encana, QEP, QEP Resources, Questar, spin-off stock, stock spin-off, STR

Now we know that Encana intends to call its oil sands unit spin-off Cenovus.  We know what to call it, (though I haven’t heard what the ticker symbol will be.)  That just leaves us to try to figure out whether this is a good deal for us or not.

Generally, getting the oil out of the sand and refining it into a usable product depends on high oil prices.  It’s an expensive process.  The oil is there and they know how to get it, but they need someone to be willing to pay enough for it to make the whole thing profitable.

Right now the price of oil is trending in the wrong direction for this source to be profitable.  Will the price of oil reverse itself enough to make this a good investment?  Eventually to be sure, but when?

Perhaps from the point of view of one seeking value in a spin-off situation, the closer the price of oil edges toward oil sands extraction costs, the better a long term value this new company Cenovus will turn out to be.

Tags: Cenovus, ECA, Encana, spin off