Why I Doubled My Husky Holding

Includes: CPG, HUSKF
by: The Moneygardener

Friday I doubled my position in Canadian oil firm, Husky Energy (OTCPK:HUSKF), just in time for the hurricane season.

The reasons I added to Husky here are many:

  • The dividend was recently cut, sitting now at a conservative C$1.20 per share on 2009 estimated trough earnings per share of C$1.80
  • Given the growth in China and emerging economies, I like the outlook for oil post banking crisis
  • Husky has very little debt and a great balance sheet
  • Given the company's ties with China, capital position, smaller size, and aggressive management, a takeover may not be out of the question
  • As mentioned previously, if I'm investing in a commodity that fluctuates wildly, I like to get paid regularly, instead of trading in and out; Husky provides this
  • If earnings snap back even close to 2006-2008 levels, Husky should be quick to prop the dividend back up
  • I also considered an investment in Crescent Point Energy (CPGCF.PK), however I think Husky offers a better valuation at these levels

Disclosure: long HUSKF.PK