Daily Stock Opinions and Ratings

Opinions

Sandy McIntyreVault Energy TrustVNG.UN.TODON'T BUYJul 03, 2007

Higher cost production. They have a capital allocation problem. Distributions plus Cap-X is greater than their cash flow so they need an external source of capital to fund some of their distribution. Too much debt.

Sandy McIntyre

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$5.24

Stock price when the opinion was issued

oilgas

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PAST TOP PICK

(A Top Pick Nov 17/06. Down 1%.) Acquired by Penn West Energy (PWT.UN-T)

COMMENT

Has declined significantly in the last 2 months. Part of it is due to the decline in gas prices. Also, their payout ratio is a little high. Market is looking for a distribution cut. Currently they are up for sale.

COMMENT

Trading below net asset value. Difficult asset base causing them to miss production in the past. Near 20% yield. Looking interesting.

COMMENT

Historically have missed on their production numbers and he would like to seat management meet their numbers before owning. F&D costs were quite high this year. Have a lot of tax pools. Trading below its net asset value.

COMMENT

Just released reserves, which met analysts’ expectations. Debt to cash flow is over 2 X’s. Payout ratio is around 80%. Have set production guidance in the past and had trouble meeting it. Have a lot of tax pool, which is becoming very valuable. Possible takeover candidate. Doesn't meet his criteria.

DON'T BUY

35% of their natural gas is hedged at $7.60. Had some disappointing production and drill results, and he sold his position. Thinks it is a takeover target within the next year, but doesn't think it will get too much of a premium.

HOLD

An interesting situation. Quite a small trust and would be an early consolidation candidate. Distribution gives about a 20% yield, yet it has one of the lower payout ratios in the sector at about 110%.

DON'T BUY

There are better producers. Smaller cap and there are safer places to invest in. Yield of about 20% is a red flag that they may have to drop their distributions.

WAIT

Missed production numbers a couple of times and has more leverage than he likes. Has a good asset base, so has the opportunity to fix itself going forward. Because it is gas weighted, not a good time to enter.

WEAK BUY

One of the smaller oil/gas trusts. Stumbled on production on a few quarters over the last few years. There is a risk this could continue. The properties within the trust are very good. Would hope for a change in management.

TOP PICK

Huge yield. Trading at a huge discount to its net asset value. Have $450 million of tax losses. When 2011 rolls around, this gives them a huge tax shield.

SHORT

If you own sell. If you want a short position, this would be one.

DON'T BUY

Has a couple of issues. Very highly levered relative to its peer group. High payout ratio.

SELL

Trading at about an 18% yield. One of the smallest royalty trusts out there. Hasn't gotten enough critical mass and could be a consolidation candidate. Better places to be.

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We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : [email protected].

Sandy McIntyreVault Energy TrustVNG.UN.TODON'T BUYJul 03, 2007

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