Robert McWhirterFording Canadian Coal Trust (Inc Trust)FDG.UN.TOWEAK BUYApr 08, 2008
The overall coal business is improving. Had trouble getting tires for their monster trucks a year ago, which slowed down earnings estimates. Ranks 30, top 5% in the database. Estimates have been cranked up by 87% in the last 90 days. Expected to earn $5.39 compared to $2.07 in 07. Trading at 11 PE. Earnings are forecast to grow 21%.
Being acquired by Teck Cominco (TCK.B-T). If you are holding this in a taxable account, there are some very negative consequences. In an RRSP or RIF you can avoid the tax consequences. He sold the majority of his holdings into the market prior to the transaction.
Being acquired by Teck Cominco (TCK.B-T). Arbitrage companies were forced to sell. There is a financing gap and Merrill Lynch (MER-N) is part of that, so the market is concerned. The deal could fall apart.
If held in an RRSP, you could continue holding. If it's in a taxable account, consider selling the units before the new deal gets done. Take it as a gain as opposed to the tax treatment that will supposedly come on the consummation of the deal. (Editor’s note. Check with your broker.)