MSM believe oil will test $60, as stated in the oil thread back in September there was going to be a good chance of a pullback.
sometimes you can be surprise of how quick it can happen. some good energy name kicked back 15-20% in a couple of days.
your stocks today went down -.5, -.9%, -5.4%, -3.3% and -1.1%.
well four good cdn. oil (that trade in the US ) and two were mentioned on Cramer, (he is mentioned in this thread) are down more sharply.
TLM -8.8%, ECA -7.8%, CNQ -3.3% PCA -3.2%.
TLM Tailsman is buying a company that operates in the north sea and norway in an all cash bid for 2.2billion. TLM is a good company and trust management that this is a good aquistion. They are already in these areas. nice to have 2.2 billion of cash on hand to do the deal.
ECA Encana fell early morning yesterday and spiked about 10% higher yesterday on rumours that royal dutch shell wants to buy them out at $65cdn.
well both companies denied it and Merrill (which has been bearish on the sector) also said it would not work. most people would argue that $12.50-$14 MCF is near a high and would wait for 8-$10 before a company would make a run.
CNQ Cdn. Natural Resources and PCA Petro Canada are great companies that throw off cash but are down on the sell off.
as for oil trust in cdn. they have faced a few challenges.
1. they have gone up a great deal, most have doubled (counting div) in the last two years. so many times people are taking profits.
2. they were more expensive often than small to mid cap companies, and sometimes seniors. that is why many companies when the hit 10,000 barrels a day they would convert to a trust.
higher valuation, then they would spin off an explorco.
3. the Federal government has stated that they are worried about the taxes loss to trusts. the changes will probably be small but this has created uncertainty and there has been a sell off in all income trusts.
4. inflation. both the US and CDN. central banks are going to raise interest rates. and control inflation. which may get out of control. a rise of .50-1.25% puts pressure on income trusts which many people buy for income.
as for oil prices believe they could test $55 this winter. they should find support there.
it depends on a few items
1. how cold does this winter get. so if the weather they get Winnipeg they also for 3-4 weeks they get on the US east coast. good sign for energy.
2. how high do they raise the rates. and how much does the economy in the US and world demand slow.
MSM I would not be over weight in this sector and I have sold some holdings recently
1. Sold EEE.un at $14.50 this was in MR. GIC it is a good oil trust but sold to reduce my trusts. after I sold they declared small production decrease (bad) however increased the dividend due to higher prices (Good)
price is now $12. good value but will probably buy some other trusts before this one, they have all sold off.
2. sold some ECA at $58 cdn. this stock goes from $55 -$60 every few days. good stock just lower my positon for now.
3. sold April $54 cdn. PUTS at $4.50 got $450 per contract may regret this...but eca below $50 is cheap.
----may sell Pen West believe only trade in cdn. trust bought at $29.50 avg. price, went to $36 now at $30. should have sold but they are paying .31 div each month and they raised it from .25 a month.
they have over 5 million acres to explore so will probably keep this one. it is the only income trust I own........for now.
MSM you stocks for the most part are holding up well, but make sure they have growing production. yr.over yr. and make sure you do not have to much of your holding in this sector.
oil/gas, and metals may have overshot on the way up, and they will probably over shoot on the way down. these stocks can get really cheap and people still sell..
by the way still own most of my position of TUI True enery (Toronto ) it is back down to $5.17......cheap counting you get part of explorco.
jr. get taken out and shot.
DEE Delphi sold but below $5 now $4.84 cdn. is getting cheap, may see if I can get it for $6 in the hope it runs to $6 again....also seems cheap..
a theme here...lol
for now I am just waiting.
thanks
selkirk
