Suncor Energy Inc. SU

My Wall Street Journal colleague Spencer Jakab made an astute observation last week: The only people who seem genuinely happy in this environment are energy investors. When oil and fuel prices are part of what is making investors nervous, owning the companies selling the oil and fuel is a pretty good hedge. Charles Gave at Gavekal argued last week that running a portfolio without energy exposure right now is “worse than a crime; it is a mistake.”

With US 10-year Treasury yields above 5% pushing up borrowing costs worldwide, many Canadian shares with solid cash generation are being priced as if money will stay expensive forever. That gap between sturdy cash flows and discounted share prices can create rare value openings. This article walks through three Canadian stocks that our cash flow focused screen flags as potentially trading below what their future cash could be worth. The three stocks covered below are only a starter set, since...