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Opinions Michael Sprung
Harvest Energy TrustHTE.UN.TODON'T BUYJan 08, 2008
Have an exposure to refining that a lot of other trusts don't. Investors were buying last year because of higher refining margins but when margins began to tighten there was some selling pressure. Have had some weakness on both upstream and downstream operations. At current prices, there is almost a 16% yield, which is a red flag. Selling at a fairly large multiple.
$22.68
Stock price when the opinion was issued
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DON'T BUY
Conventional oil/gas production in Western Canada and refining in Newfoundland. Had taken on a lot of debt to acquire the refinery and refining margins have not been good. Doesn't see this changing for while. Changeover in 2011 is another challenge and they have their work cut out for them.
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COMMENT
One of the few companies that has a refinery and have done quite well on the refinery margins. Has been playing this through the convertible bonds, which he thinks is a better way of playing it.
Jaime CarrascoOwned
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COMMENT
One of the riskier oil/gas income trust. Huge refinery in the Maritimes. Plant was upgraded and is good. The refinery can swing earnings around significantly. Oil and gas operations have not been that great. Likes the yield of 8.6%. Doesn't expect it to go back to its high levels of a couple of years ago.
David CockfieldOwned
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