svosavvy

Canadian Energy Trusts: The Best Long Term Income and Dollar Hedge? (Part 2)

Look, yeah nat gas sucks right now. I would look to the future, the cap and trade future. The current administration cannot fall on their sword on this one right now there's too much other stuff going on at the moment, but, they can use strong toothless language. The only alternative to coal right now is nat gas, I wouldn't be surprised to see a form of an inconvenient truce. One that says we (industrials) promise to pollute less (burn less coal and more nat gas.)

Canadian Energy Trusts: The Best Long Term Income and Dollar Hedge? (Part 2)

To clarify, "laws were meant to be changed" I meant that in the context of "rules are made to be broken"

Canadian Energy Trusts: The Best Long Term Income and Dollar Hedge? (Part 2)

I agree with cliff's latest comment, laws were meant to be changed. I take a wait and see approach, on 2011. Someone in gov't or lobbies may actually wake up to the idea that money would massively flow out if severe structural changes to the tax law were allowed to take place. I believe to the opposite of an above contributor about the USA mlp structure. I think that is a competitive model that canroy's may wish to peg themselves against as a viable competitive model. I would also add that a good management is priceless in these times, and would humbly add that it will be a real challenge to make money on oil priced in usd though increasing in price, may get offset by input costs priced in the cad which may strengthen in light of future usd weakness. Long canroys

Three Top Canadian Royalty Trusts

Not to be a downer, but, pwe in their last quarterly guaranteed their distribution level through to the jan payout. Well, we're here I wouldn't be surprised to see a cut out of them next month. I am still long pwe (and pvx). One of my main reasons for liking the canroy's is the fact they must payout 90% of their takings which leads to very high yields which lend a margin of safety. Honestly in today's environment if I can get a 5+% yield out of something then I'm pretty happy. I bought some pwe at $27 a while back, but, at the current distribution I'm still at 15% and if they cut it in half it's like a +or- 7% still not too shabby. I guess my point is they are not allowed to not pay a dividend unless they make no money. Try and find another class that must pay you something, heck I know people who piled into fcx for the dividend and then they cut it altogether, now they must wait for share appreciation to be their payout, good luck. This is a nongrowth environment so imho you have to look for something that will pay you a stagnation tax (that's code for dividend).

Canadian Royalty Trusts Will Never Return to Their Former Glory

I doubled my position in pvx on 11/13 actually upped it by %120. Was looking for fallout from dist reduction, but, really saw none, I couldn't believe it was a relative non issue. From what I can see this along with all other oil related stocks imho have been lumped together and thrown in the trash can. Especially since I thought pvx's quarterly was a real rip snorter this time around, except for the down guide, but, everyone is guiding down. I am looking for the discarded carcasses of good companies mr. market is offering up. I may buy more tomorrow as I see opec's inaction over the weekend giving a real catalyst for more near term down action. I think these canroy's are neat animals, you get the oil exposure, a killer dividend, also I think an insurance policy related to other oil stocks exposure to the shenanigans of the world theater. Diversified not diworsefied, lots of nat gas exposure which I like going forward if there is a pinch on coal I look for a bubble there. All in all sometimes getting out of bed in the morning is a risky/bad decision, but, risk is the spice of life. If you don't like risk then buy bonds because shareholding is like marriage for richer or poorer. I know it's hard to think of any upside during a bombardment, but, that is the reward of the diligent. Happy Holidays, someone drink some scotch for me, lol.

Canadian Royalty Trusts Will Never Return to Their Former Glory

Oh yeah, even with the pvx reduced distribution, you can basically give those guys a dollar at their current DEPRESSED share price and they will give you back a penny a month. That's compelling value

Canadian Royalty Trusts Will Never Return to Their Former Glory

Thank you Mr. Ward for your thoughts regarding tax issues I always get a kick out of reading about the canroy tax boogie man. I also found it interesting that no one has mentioned the risk management strategies employed when talking about the price of oil in this post. I am long pwe and pvx and know they both employ costless collars as a means of reducing volatility for a portion of their supply (looking pretty smart these days imho). Also the very nature of "E&P" heck just call it the business of oil is truly the "I drink your milkshake" mentality. You exploit and move on, that is the nature of commodotizing the ground. Follow the model of any hard good be it metals minerals or energy. Additionally, pvx already cut their distribution big time (I take that as a good sign that they have a grasp on reality or at least can get away with it). Also pwe has already stated they will re evaluate their distribution funding level after the january payout.
thanks