Perpetual Energy (PMT.TO) Buy, Sell or Hold

Perpetual Energy (PMT.TO)

0.40

-0.01 (2.47%)

as of Nov 4, 2024, 7:42:34 pm Market Open.

27 watching

WATCH

Virtually all gas. Very conservative management with a fairly low payout ratio. Will trade with natural gas stocks, but there is yield support that should give it some support. He would want to see some positive price action before he bought.

WAIT

100% gas. Sold his holdings last fall, presuming low gas prices. Would wait to see how strong gas imports are this summer. He likes it. Has good plays and is well managed and a good cash position.

DON'T BUY

Very short reserve life index of about 5 years. Also gas weighted.

BUY

Primarily natural gas weighted. Cut their distribution in December. Debt levels are a bit higher than he likes. He owns it for leverage to natural gas. Distributions should be sustainable over the short and medium period. Likes it at this price.

COMMENT

(Market Call Minute.) Potential for an acquisition and consolidation with their parent Paramount Resources (POU-T). Doesn't think it will occur for the next 12 months. Tremendous yield may not be safe going forward.

DON'T BUY

Thinks they will have problems they will have to face going forward. Worried a little bit about the distributions.

SELL

(Market Call Minute) A gassy trust, which is the kind of thing he avoids.

WEAK BUY

Not a trust that we like. All of these trusts have been big under performers. If you don’t mind the management, you can buy.

COMMENT

Has some issues with debt, so sold some assets. Thinks their payout ratio will be in the 65% - 70% range. Good management.

SELL

Would not be an owner of this one right now. He would look at an affiliated company Paramount Resources (POU-T). It doesn't pay a distribution, but is probably one of the stronger energy names.

HOLD

Had to cut their distributions. They are trying to get to a 50% payout, which allows them to continue the payout as well as reinvest in the ground.

DON'T BUY

Slashed their distribution by 29%, which came after an equity issue. This caused a drop in the stock. A decent name, but it only has a 5.3-year reserve life. Dead money for a while.

BUY

The problem here is natural gas prices. There is a lot of inventory. He believes that natural gas prices will recover..

COMMENT

This is a classic example of what is going to happen to the trusts as they get nearer to 2011. It will depend to some extent on the tax pools. Expect distributions will be cut.

BUY

Primarily weighted to natural gas. Could see some choppy trading in the short term based on his short-term forecasts that natural gas might not be that robust. Likes it longer-term. Good management. Good for a long-term hold.

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Perpetual Energy (PMT.TO)