Ben Cheng Argent Energy Trust AET.UN-T BUY Feb 28, 2014

If the stock stays flat here and you clip an 18% yield, which is not a bad return. The risk is that eventually they may have to cut the dividend. Pretty hard for them to raise equity here to do more acquisitions or finance growth for issuing equity with an 18% yield. Have gotten themselves into a bit of a corner here with some poor operational results and packed on too much debt. $5 is probably the right price for the stock but your 18% yield could become 10% pretty quickly if they decide to cut it later this year. There are lots of companies out there that give you that same total return potential of 15%-20% without the risk of a dividend cut. These would be names such as Whitecap (WCP-T), Torc (TOG-T), Crescent Point (CPG-T), Twin Butte (TBE-T), Peyto (PEY-T) and ARC (ARX-T), which can give you 15% total return without a potential dividend cut.

Not sure what is going on with this company. Yield of almost 24% which doesn’t look sustainable. If they have to cut the dividend, the stock will probably go up. Be careful.

He looked at it in the past. Management is being very cautious with this cut in the dividend. The fall in share price still makes it an attractive dividend. Wait a few days at least.

This is one of the most recent poster childs for the kind of financial engineering that gets sold to investors. It paid out a dividend it could not afford for far too long. They could not keep the game going because they could not find new things to buy to get financing to keep the scheme going. Don’t even count on it being taken over.

If you take out DRIP payments, a 77% cut in the yield will not solve their problems. Announced they are going to cut their CapX by about 20%. They really have to start selling some assets.

When stocks are cheap in this sector, they are cheap for a reason. This one he has been very cautious on. The leverage is far too high. You might get a bit of a bounce.

Lots of turnover at the top. They have not performed well and tacked a lot of debt onto the balance sheet. There were concerns when the reserves came out and they cut the dividend. Thinks they will get acquired.

Well results never did hit what they expected. To say there is value in this name is hard. A different operator may well produce better well results.

This along with Eagle Energy Trust (EGL.UN-T) and Parallel Energy Trust (PLT.UN-T) are Canadian trusts that have operations in the US, mostly in Texas. This one and Parallel had big stumbles lately which pulled down Eagle a little. People are concerned a little bit about the dividends in all 3 cases. Yield of 8.5%.

There are a lot of better places to put your money. Have had a lot of trouble in the past, which is not going away, because they are having difficulty with asset sales. It got to a point where they had way too much debt and had to do a big write off of their assets. Their CapX is actually smaller than their interest payments.