I have a special place in my heart for Oil and Gas trusts because of their juicy yields. Plus I feel it's a great way to play the increasing tightness of oil and gas supply. I like buying a business that produces a product that China wants.
Plus I get paid to wait for the fundamentals of peak oil to kick in.
I plan to add to my position in Harvest Energy Trust. I think we will see the low for Harvest at the begining of the oil and gas shoulder season which starts in March. I will probably add to my position then.
I have been concentrating on Harvest because I see it has unrecognized value in the trust sector because of its recent purchase of the Come-by-Chance refinery in Newfoundland. Most analysts will not take a chance on valuation metrics until they see a full quarter of revenues from the refinery.
This oil & gas trust is the closest thing to an integrated oil company we will ever see in the trust sector. It is yielding a wopping 17.3%.
I think there is a chance that they might cut their distribution and when they do I will be buying on the dip.
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