| aug 31 2007 | | Natural Gas Investments. | This time I am doing something a bit different. This investment analysis is long term, more akin to the Graham method of value investing, contrary thinking. Natural Gas closed Thursday @ US$5.69 per million BTU on the 3 month contract. I am concentrating on Income Trusts as they pay you to hold these investments while you wait for the valuations to rise. Here is the list I have compiled, which is not exhaustive but will give you plenty to be going on with. At the bottom of the page you will find a key to understanding the figures and some websites to do your due diligence.
O@G Producers.
1. 2. 3. 4. 5.
AVN.UN 15 XXX 12 16
ALA.UN 7 XXXX 24 28
AET.UN 12 XXX 20 24
BTE.UN 12 XXX 18 22
BNP.UN 12 XXX 26 32
CNE.UN 15 - 14 18
CPG.UN 13 XXX 18 20
ERF.UN 11 XXX 40 50
FET.UN 10 XXX 17 20
HTE.UN 16 XXX 25 30
VET.UN 5 XXXX 31 40
TET.UN 15 XX 5 10
TUI.UN 18 XX 5 10
PGF.UN 16 XXX 18 20
PWT.UN 13 XXX 30 35
PEY.UN 10 XXX 16 20
PWI.UN 14 XXX 20 26
NAE.UN 15 XXX 12 14
PMT.UN 15 XX 5 12
O&G SERVICES.
BAD.UN 7 XXXX 16 18
CEU.UN 14 - 6 8
CET.UN 10 XXX 8 10
WLL.UN 19 XX 4 7
TDG.UN 10 XXX 12 16
Key:
1. Trust name.
2. Yield %
3. Globe and Mail rating.
4. Target entry price.
5. First exit price if not using stops.
On fundamentals we could easily see Natural Gas at US$8 per million BTU or even back up to US$12. Gas like oil is a resource that has peaked, existing production is in decline and new prospects are not being found in sufficient quantities to replace reserves. Short term disruptions like hurricanes in the gulf could have a profound effect on prices. Warmer winters and cooler summers would allow reserves to be maintained at the current historically high levels. So this is a long term play at around a year or more. I think we are near to the bottom for Natural Gas prices so collect the yield while you wait for capital appreciation. As with all investments get professional advice and be aware that you could lose all or some of your investment. I would suggest a basket of four or five Trusts to spread the risk. For disclosure purposes I own AET.UN PWT.UN TET.UN TUI.UN others I have traded in the recent past.
Globeinvestor.com and bigcharts.com are both good sites for technical analysis.
oct 01 2007
The Source adds:
nice little 30% pop on PWI.UN on news it is buying
VNG.UN I owned both so sold PWI.UN and will wait for my new units to be issued. Now yielding only 11% Natural Gas is just over US$7 and winter months could see volitility, in both directions. Hold for the long haul but nothing wrong with trading opportunities when they arise. Remember a gain is not a gain until you cash it.
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