CENOVUS ENERGY INC.

Where It Passes

Where It Falls Short

• Profitability13% pass✓ 12✗ 23▾

  14 of 16 flag CVE's profitability — Graham, Buffett, Lynch +11 more

  Net income / market capitalization+5.46%; #1552/6340 (top 24.5%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive EPS (10 years)8/12 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)8/12 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)12.6%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)0.29

  ✓Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR65.0%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE12.4%

  ✗Lynch> 15%

  EBIT / Enterprise Value6.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=6.3%, ROC=10.9%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets6.20%

  ✓PiotroskiROA > 0

  ROA Change YoY5.56% -> 6.20% (delta: +0.64%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=12.97%, ROA=6.20%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue9.0%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity12.4%

  ✓Dreman> 12%

  Margin of SafetyP/E=18.5x, P/B=2.4x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity12.4% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-34.1% (IV=$21.68 vs Price=$29.08)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency8/11 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue

  ✗Ackman>= 15%

  Net Income / Shareholders Equity12.4%

  ✗Ackman>= 15%

  5-Year EPS CAGR65.0% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trend

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+12.43%; #1476/5226 (top 28.2%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0338; #2060/5884 (top 35.0%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR65.0% over 4 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years7/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag CVE's efficiency — Graham, Buffett, Greenblatt +4 more

  Current Ratio1.57

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)

  ✗Buffett> 10%

  ROIC - WACC

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)10.9%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.42 -> 1.57

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.96x -> 0.78x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.57

  ✓Dreman> 1.5

  Return on Invested Capital

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=unavailable; FY2025: ROIC=unavailable

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)

  ✗SleepROIC > 12% in a majority of years
• Valuation models14% pass✓ 1✗ 6▾

  Models split on CVE at $29.08 — fair values range $7.58–$39.25

  Graham fair value$20.81

  ✗Graham-39.7% margin vs $29.08

  Lynch fair value$39.25

  ✓Lynch+25.9% margin vs $29.08

  Greenblatt fair value$15.51

  ✗Greenblatt-87.5% margin vs $29.08

  Dreman fair value$21.57

  ✗Dreman-34.8% margin vs $29.08

  Pabrai fair value$7.58

  ✗Pabrai-283.6% margin vs $29.08

  Akre fair value$25.80

  ✗Akre-12.7% margin vs $29.08

  Templeton fair value$14.87

  ✗Templeton-95.6% margin vs $29.08
• Valuation15% pass✓ 4✗ 24▾

  11 of 13 flag CVE's valuation — Graham, Greenblatt, Dreman +8 more

  Net income / market capitalization+5.46%; #1552/6340 (top 24.5%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Price / 3-yr avg EPS20.1x

  ✗Graham<= 15x

  Price-to-Book Ratio2.4x

  ✗Graham<= 1.5x

  P/E x P/B47.70

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)0.29

  ✓Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value6.3%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=6.3%, ROC=10.9%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS18.5x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)9.1x

  ✗Dreman< 8x

  Price / Book Value per Share2.4x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=18.5x

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=18.5x

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=18.5x, P/B=2.4x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-34.1% (IV=$21.68 vs Price=$29.08)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low247% of trailing low ($11.77)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Positive book equity / market capitalization+0.4393; #3101/6449 (top 48.1%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS18.5x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E3.61

  ✓Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share2.61x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.6905; #2219/5247 (top 42.3%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+5.48%; #2127/6202 (top 34.3%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts15% pass✓ 2✗ 11▾

  Split decision: 10 FAIL · 4 NEUTRAL · 2 PASS

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (3/7)✗GreenblattRank #1251✓PiotroskiPASS (F-Score 5)✓DremanPASS (5/11)•MungerNEUTRAL (3/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (1/5)✗AckmanFAIL (3/9)✗TempletonFAIL (3/8)✗SleepFAIL (2/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (3/6)•SchlossNEUTRAL (4/7)•OshaughnessyNEUTRAL (Not ranked)
• Cash Flow20% pass✓ 3✗ 9▾

  8 of 10 flag CVE's cash flow — Buffett, Lynch, Dreman +5 more

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  FCF Positive and Growing$-421.9M

  ✗LynchPositive and growing

  Operating Cash Flow$6.0B

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=12.97%, ROA=6.20%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)9.1x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=18.5x

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive3/6 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency11/11 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth38% pass✓ 6✗ 7▾

  5 of 8 flag CVE's growth — Graham, Dreman, Ackman +2 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)0.29

  ✓Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR65.0%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -21.9% vs Rev: -4.1%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency8/11 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-4.1%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR65.0% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trend

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR27.9%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR65.0% over 4 years

  ✗Neff7%-20% annualized
• Debt & Leverage50% pass✓ 8✗ 7▾

  6 of 12 pass — Graham, Lynch, Piotroski +3 more object

  Debt Levels0.35

  ✓MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  LT Debt vs Net Current AssetsLT Debt $8.1B vs NCA $2.6B

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.35, IC: 8.9x

  ✓BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.35

  ✗Lynch< 0.33

  Cash - Long-term Debt$-6.1B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change12.99% -> 17.39%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.57

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.35

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Interest Coverage & Debt/EBITDAIC=8.9x, D/EBITDA=N/A (D&A unavailable)

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.35

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.3489; #2130/4210 (top 50.6%)

  ✗AsnessTop 30% of eligible cross-section