lickety split

High-Yield Canadian Royalty Trusts: What's the Catch?

just another comment on conglomerate trusts and npf-un.to - valuation on these units are imho way irrationally depressed becuase (a) tax confusion, and (b) market sentiment, and (c) analysts have pissed all over the npf conglomerate vehicle, by applying 20% or 30% NAV discounts - i didn't listen to analysts when they told me to buy nortel at $120 pre-reverse split and i'm not listening to analysis when they beat up on some vehicles/issuer becuase they are not getting enough investment banking business from them... if i can buy something at 4x cash flow with heavy insider ownership and which in my personal assessment has significant upside catalyst to cash flow i will buy and i will buy it all day long - there is alway a chance something can blow up though the diversified stable of busiensses obviously helps mitigate that - its a calculated risk that is for me is within my risk parametres.

also these guys ipo'd at 10$ and 9$ a unit, and bonds were issued at $100 face value all within the last three years - there has been nothing fundamental that has changed that should precipated the value decline of this magnitude in both the units and the bonds...

as indicated i am still marginally underwater BUT after talking with management and scrubbing the financials and seeing the insider buys and the issuer buy back i think i'm starting to realize that there really is nothing i am missing and that this thing is simply mispriced.

High-Yield Canadian Royalty Trusts: What's the Catch?

oh and one other comment - the 2011 tax IS a done deal believe me there is no going back

High-Yield Canadian Royalty Trusts: What's the Catch?

funny thing is i am underwater on my newport taking into account my distribution but won't be for long - i am somewhat baffled by the value some of these trusts - i have to believe that the 2011 tax changes have driven this - non-canadian investors have dumped the units on mass due to the 2011 tax that will cut returns by 25% or so .. and Canadian investors are simply confused by the tax systems and probably don't appreciate that when held in your taxable (non-pension account) that you will be getting a tax credit for any corporate tax paid... this imho has created an unbelievable opportunity for resident of canada and in the case of newport i see significant catalysts to the upside in free cash flow - i.e. increased natural gas drilling due to price moving from about $4 to $13 for nat gas re their oil service companies - i like the diversified conglomerate heavy insider model - in about 4 years my units will have been fully paid off and i will have a peice of these heavy insider ownership busiensses for free...