Saturday, February 17, 2007

Keep an Eye on Harvest Energy Trust HTE.UN-TSX

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.

No comments: