The Forensic Accountant
Research analyst, oil & gas, energy

Hugoton Royalty Trust: Distribution To Rise, Only Temporarily

Hugoton Royalty Trust (NYSE:HGT) is an oil and gas trust with wells in Kansas, Oklahoma, and Wyoming. In an article last November, I noted that HGT's distribution was likely to fall (it has). But with recent changes in gas prices, production declines, and a double-dip legal charge, I revisited the model and my earlier assumptions (some were poor). The results suggest that while HGT remains substantially overvalued, its distribution could be in for a roller-coaster ride in 2014, creating both long and short opportunities for those who can tolerate the risk.

Near term distribution rise hides trouble down the road

As those familiar with my articles know, I analyze trusts using a bottom-up, engineering-style model that considers...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
PRO Top long ideas returned 21.7% in 2016**
"As a PRO member, we get uniquely valuable perspective that go beyond our quantiative analysis... We rely on PRO to get beyond the numbers quickly and add much needed perspective. It keeps me ahead of the next big thing. - Mark Choate, Malaga Cove Capital"
Mark Choate, Malaga Cove Capital
"Contributors (writers and commentators), often have a long history in the secuirities they opine on and some are clearly well positioned industry participants with detailed industry views that can help provide color on where the skeletons are buried in a particular secuirity and/or industry."
Jim Roumell, Roumell Asset Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details