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

HOLD

100% gas weighted but has hedged about 50% of their production. 5 year reserve life. Specialists in shallow gas, which is the most likely to be curtailed when gas prices are low.

COMMENT

Has always been fairly aggressive in their reserve life calculations, as well as the amount they pay out. Trusts growing by the chequebook, and paying out most of what they generate, have been badly affected. Has interesting acreage and will be leveraged to the price of oil.

DON'T BUY

Very short reserve life index. Primary focus is natural gas. Their ability to maintain the reserve life is going to be a challenge. If you're looking for natural gas, he would suggest looking at Focus Energy (FET.UN-T), Peyto Energy (PEY.UN-T) or Progress Energy (PGX.UN-T).

WAIT

The biggest problem here is that it is a gas weighted trust. Good management. If you hold it, you'll get a decent distribution but if you want buy or exit, wait for a turn in the commodity.

DON'T BUY

A gas weighted royalty trust. Would prefer Zargon (ZAR.UN-T) or Focus (FET.UN-T) because of their longer reserve life and lower debt multiples. Has a pretty good hedging program in place.

COMMENT

Very highly weighted to natural gas. He is bullish on natural gas for 2008, but there will be short-term weakness. If your horizon is less than a year, he wouldn't hold. If you have a longer view, then it is a good hold. Distributions could be in danger.

DON'T BUY

Gas weighted. Gas prices have been improving. Prefers other gas focused names such as Enerplus (ERF.UN-T) Arc Energy (AET.UN-T) Focus (FET.UN-T) and Shining Bank (SHN.UN-T).

SELL

Very short reserve life. A high beta play on natural gas. Limited growth opportunities because of government trust rulings.

BUY

Lower reserve life and 100% gas focused, but have been doing this for 23 years. The bigger bet is on gas prices rather than survivability. If gas prices stay at this level or go higher, this is a name that you might want to add to.

BUY

Management has done a good job and got some good properties. Facing closer to the 30% than the 20% tax obligation for trusts. Gas oriented.

DON'T BUY

The most natural gas weighted trust out there. Based on his views of natural gas, this has a favourable outlook longer-term. Has a relatively short reserve life. Prefers more conservatively run trusts.

DON'T BUY

They have cut distribution this year. It is 100% gas. It has a short reserve life. Best to go with another name.

DON'T BUY

Basically a gas play. High payout ratio.

HOLD

Gas weighted. With their distribution cuts now out of the way, it is probably a decent entry point. Not the best trust to play a turnaround in gas prices.

BUY

A very good company. Well-managed and well positioned in the energy area. A good long-term investment.

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Perpetual Energy (PMT.TO)