ERF’s share price has dropped mainly because of low natural gas and oil prices.  However I really like the monthly dividend payments which still amount to 9.5% per year.  There is no doubt that gas and oil prices will go up and I’m happy to wait while getting well paid in the mean time.

Enerplus (ERF.UN-T) is steadily increasing it’s land holdings and production.  They also have made a commitment to convert from an “Income Trust” to a Corporation.  They have also chalked up sufficient tax credits allowing them to continue paying their current dividends for the next couple of years.  I can live with that.

Because of the market’s volatility I am being very cautious about buying anything and may actually sell something on any significant rally.  I think this is getting to be more and more a range trading opportunity rather that a long term holding market. But it’s summer and that means unpredictability.

That’s all for now.

TL

Not just hoping for a winner.  But almost sure of it.  Right now most drilling companies have lots of idle equipment sitting around.  Precision is no exception.  But the scene is rapidly changing.  All over the continent dry-land drilling activity is picking up and day rates are also increasing.

Precision is very cheap right now trading at a little over book value and about 12 times current earnings.  If the stock only were to regain half the amount lost during the recent recession it will have to double to CAD$16.00 from the present price of about CAD$8.00 which I believe will happen in the next 12 to 18 months.  If the price were to equal the price at the previous high of $36.00 (at Sept 2007) it will have to quadruple (or rise 400%), which I think may happen over the next 24 months. If the price were to reach half again as high as the previous high it would be CAD $54.00 which it might do over the next 36 months.

A lot of mays and mights here but it’s all possible.

All the best,

Ted Lagerway

After a broken computer and a trip to Vancouver I am now trying to find something to cheer about.  Today’s rally was a welcome change from the grind we’ve been experiencing.  However, it remains to be seen how strong it is going to be.

In an other portfolio I have added some ING Groep NV at US$7.32 to a position I already have.  This is one of Europe’s 5 top banking firms, which trades on NY as an ADR. On the net they are still showing a loss but in fact the first quarter was very good and put them in a positive earnings position.

I also own but have not yet bought more shares of ING Prime Rate Trust (PPR-N).  It trades around US$5.50 and in my book rates as a buy. The fact that they pay a 6% dividend helps make it attractive. Their Head Office is in Scottsdale, AZ., for all that matters.

On the whole I find very little to cheer about.  Although most issues I follow are presently short term oversold and due for a rebound there really are very few I’d consider cheap. On the whole I’m keeping my powder as dry as I can, but will buy selected issues on any days markets are selling off 100 points or more. I do like to buy at a discount those items on my buy list.  That includes iShares 60 ((XIU-T),  Enerplus Res. (EFR-T) and iShare Cdn Energy (XEG-T)

Until next time,

Ted Lagerway

No, not yet.  But it obviously was just as well to put my head in the sand and wait for the (financial) cannons to stop firing.  Things are looking better now.  My iShares Cdn. Energy ETF (XEG-T) is still struggling but I will give it a little more time.  The iShares Cdn Materials ETF (XMA-T) was lagging for awhile but is now on fire along with gold, silver etc.  The steadiest performer has been iShares Cdn. 60 ETF  (XIU-T) as the TSX has been solid as a rock.  Enerplus Resources (EFR.un-T) is also holding it’s own.  But the main attraction there is the 9.5% annual dividend which is paid on a monthly basis. A little cash flow never hurts.

Are we now out of the woods for the duration?  No, just for a little while.  Maybe a few months.  By then (end of June) I will be seriously taking what ever profits I have and generally reducing equity exposure in favour of cash or bear ETFs.  Bonds are NOT a cash equivalent, there are a separate type investment and I have never had any luck with them.

So for now I am breathing a little easier with a watchful eye on the clock.  I am also keeping close tracks of the bear ETFs I am following and intend to switch from bull to bear funds in order to profit from the decline in stock prices I expect later this summer.

That’s all for now

TL

Is this the start of a major correction?  If you are to believe some of the talking heads on TV or some of the newsletters cluttering up the mailbox – it is.  To me IT’S IRRELEVANT.  I just follow the trend as I’ve done for many years and it will tell me what to do.

Right now it’s telling me to do nothing or may be even looking for bargains.  Now, there is a difference between bottom fishing and bargain hunting.  I don’t like bottom fishing because there is too much danger of getting caught in a giant clamshell.  Bargain hunting is OK although sometimes I get fooled there too.  Just because a security is cheap in terms of dollars doesn’t mean it’s a bargain.

Again the indicators I follow almost always tell me what to do.  We had a correction during January/February and I believe it’s yet a bit early for a major one. But I am not fooled into believing it won’t come, because it will.  I just don’t know when.  Meanwhile I keep on the lookout for likely buy or sell candidates.  I mentioned Pfizer (PFE-N) awhile back and it is now even cheaper at US$16.50. PFE is going to lose it’s patent on Lipitor which has many people running for the exits.  But the Co has several other important products in the pipe and pays a nice 4.5% dividend. I also like, and have bought some, Precision Drilling (PD.UN-T) at CAD$7.88 and will buy more if it comes down.  I also still like, and own,  Enerplus Resources (ERF.UN-T at CAD$24.00 and will buy some more of it.  It offers a nice safe path into the depressed natural gas market.  Depressed for now but not for long.

That’s all for now.

CU  TL

But going back to BC was not a fun trip.  High winds in Arizona, snow storms in Nevada and again in BC.  But today it was all worth it as we baked in the early spring sunshine on the lake shore.

Wish the markets were as accommodating.  But what can we expect after a the screaming rally we’ve enjoyed.  So, the market has to take a breather and there are always ample reasons.  Greece, the Iceland volcano, Goldman Sacks pulling the usual stunts and ripping off investors.  But all that too will pass.  I think.

There are still bright spots on the investment scene.  A few down days will make some good buys even better.  Our purchases of Enerplus Resources (ERF.UN-T) are working out.  It’s gone up and back down to our buy level.  This should be a good opportunity to add to positions.  This Oil/Nat Gas producer still yields a 9% annual dividend paid monthly. It will continue to be volatile for awhile till energy markets stabilize.

Otherwise there is little else of importance to report. Till next time, Have Fun.

TL 

Mainly because I want to limit the number of securities in the portfolio, not because there is anything wrong with Pfizer.  The ENERPLUS went through at CAD$23.62 last Monday.  Since then I’ve covered 1800 miles driving through Arizona, Nevada, Idaho, Oregon and Washington. Now I’m back in British Columbia, where I expect to be for the next 6 months or so.

I should travel more often because every time I do the market takes off on a tear.  All my choices are ahead of the game and remain on target for 20% average annual gains.  Right now both US and Canadian markets have broken out of a tight trading range. It appears as if the narrow band has been broken and new intermediate highs lie just ahead.  However, we must still be on guard against unpleasant surprises as this market may still hand us our heads on a platter.

More later.

TL

I wanted to buy another one half position in ENERPLUS RESOURCES (ERF.UN-T OR ERF-N). However it doesn’t want to get down to my buy price.  So, I’m looking at another stock.  Yes I’m deviating from ETFs but one has to hit opportunities where they happen to be.

Right now I’m looking to add a position in PFIZER (PFE-N) one of the largest Pharmaceutical companies in the world.  I bought PFE before at $23.00 and sold it at $27.00 but now it has sold off because they will lose their LIPITOR patent next year.  Already the vultures are in a feeding frenzy to produce and sell this product.  It will mean a significant loss of revenue to PFIZER but it will not be life threatening.  Another product is already adding to profits and a number of additional prospects are in the pipeline.

PFE pays a $0.72 dividend which is well covered by earnings per share of $1.36 and at the current stock price of $17.00 the yield is a respectable 4.18%.  I can live with that, knowing that Pfizer has been around for a long time and will prevail for a long time to come.  The P/E ratio is a decent 12.7 and the company last year earned 50 billion dollars. 

So, as long as I can buy it at less than US$17.25 I’ll grab some.

That’s it for today.  You’ll notice that when I said my twittering would be irregular I wasn’t kidding.

TL

We may see a little weakness in the markets or at least our securities but it should not be too painful.  i60 (XIC-T) is bumping up against it’s upper trend line  and may back up a little from here.  i Energy (XEG-T) should be OK and keep rising with the rising price of oil.  i Materials (XMA-T) is closely tied to gold and other commodity prices and should do well over the next few months also. 

My most recent purchase, Enerplus Resources (ERF-T) is acting well. I’ve only owned it 5 days and already it’s up 5% and meanwhile it pays a monthly $0.18 dividend.  At today’s stock price that amounts to a 9.25% dividend yield. If Natural Gas  prices would only go up Enerplus will do very well. I would like to add to my position and will do so if there is any pullback in the share price.

Another security I am following (also, like Enerplus, NOT an ETF) is Yellow Pages Income Trust (YLO-T) which is a very strong and well diversified publishing company.  The share price right now is about CAD$6.00 and it pays a 13.2% dividend.  Yea, you saw that right. Hard to pass up.  It also pays on a monthly basis so it’s a nice source of income. However there is a fly in the ointment.  Like other Trusts it will revert from a trust back to a regular corporation later this year.  However, the company has stated that it expects to continue paying the same dividend amount.  We’ll see.

That’s all for now.

Ted Lagerway

I am buying a position in my fund portfolio of  ENERPLUS RESOURCES FUND, trades on the TSX (ERF-T) and on the NYSE (ERF-N)  for about $23.00.

The company has just declared its monthly dividend for March 2010 of $0.18 per unit which is payable to share holders as of March 8, 2010 which translates into a dividend yield of 9.1% annually.  Not bad if you consider that the company’s oil and natural gas holdings offer the potential for significant capital gains over the next few years.

The company’s website is: www.enerplusresources.com