Closing Energy Trust Position
I have decided to sell my entire Harvest Energy Trust (HTE) position. This company is going through some major changes, potentially getting acquired by a Korean company, and most importantly, they have suspended their dividend. The dividend is the reason I held this trust, so without it, I don’t see a reason to hold anymore.
I benefitted from buying this position at a much lower price (average share price around $5.65) and sold all shares at $9.45 a share for a 67% gain not counting a year or so of dividends. Not bad.
Since I’m not sure what the direction of this company is going to look like and I’m not longer being paid to find out, I’d rather not risk it. As such, I’m out of the position.
I’d like to deploy this cash into another energy trust, so the search begins…
A few that I’m considering:
- Pengrowth Energy Trust (PGH)
- Penn West Energy Trust (PWE)
- Baytex Energy Trust (BTE)
All of these companies are in a transitional time period as they outline plans to become Corporations due to the expiration of the Canadian law that provides a tax advantage and thus, higher distributions. Because of this transition and because a bounce in the dollar could cause oil prices to go lower in the short run, there really is no rush to jump into these names.
As I do more research and look for attractive buying opportunities, I will post updates…
For a more complete look at my major trends I’m following including the oil story, click here.