Protected Principal Retirement Strategy: Eagle Energy Trust Update

Dec. 4.12 | About: Eagle Energy (EGRGF)

Back in October I posted an article expounding on Eagle Energy Trust (ENYTF.PK). You can revisit the article (here). In November I initiated a small position based upon the company's financial situation and the annual dividend of $1.05.

In late October and throughout November the stock price was hammered, which got my attention. I e-mailed Investor Relations and received a telephone call the same day. I was told that there was no problem with the company, that their recent guidance was unchanged, and that the dividend at current levels was sustainable.

With this news in hand I decided to increase my focus on the daily price action of the stock. Average daily volume increased significantly, and at the end of November gapped down once again into the mid $7 range.

By this time I had increased the portfolio's position to just over 1,000 shares (not a lot, but enough to create concern). This morning, on my daily visit to Eagle's website I noticed a new press release. Here is the link (Press Release).

According to the company it appears that recent activity was caused by an institutional trader taking a tax loss.

Eagle reiterated previous guidance and announced that operating budget and 2013 guidance would be released next week. It further assured that distributions are intact, and there are no plans to reduce them from current levels.

Based upon what seems to be truthful information, I have begun to increase the portfolio position in somewhat.

Disclosure: I am long ENYTF.PK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article does not constitute a buy recommendation for readers. You are encouraged to perform the appropriate research before initiating, or adding to positions.