Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
|
|
|
|
Thanks in Part to its 11.1%
Yield, This Canadian Trust is Staging a Comeback |
Published:
June 6,
2007
Provident Energy Trust (NYSE: PVX) -- Like many of
its brethren, shares of this Canadian royalty trust are
recovering from their November 2006 lows.
As you may know, on October 31, 2006, the Canadian government
laid out proposed changes to the tax treatment of the country's
high-yielding royalty trusts. They said trusts would no longer
be able to avoid paying corporate income taxes but instead would
be taxed as ordinary corporations by 2011. The move would reduce
the cash flow that powers the double-digit yields that have made
these investments so attractive.
|
Register
for Carla Pasternak's High-Yield Investing newsletter
today and you'll receive as many as SIX in-depth research reports absolutely FREE!
|
|
Following the announcement, investors fled for the exit doors
and Canadian oil and gas trusts lost about -20% to -30% of their
market value. But now they're starting to turn around.
Provident, for instance, plunged from a close of $11.95 on
October 31st to a low of $9.00 following the announcement,
shedding -25% of its market value in just two days. In the past
few weeks, the shares have been trading at their previous
levels, hovering around $12.00.
A few factors are driving the shares higher. For starters,
investors are starting to realize that companies like Provident,
with solid fundamentals, can continue to support their rich
payouts for at least another few years. The company pays a
monthly distribution of about $0.11 per unit (the exact amount
varies with the Canadian/U.S. exchange rate). That equates to
$1.32 annually and gives the trust a yield of 11.1%.
With over half of its production from natural gas, the company
is leveraged to rising natural gas prices. But it's the
lucrative midstream (processing and transporting) business that
makes PVX so attractive. The company is one of only two Canadian
firms that controls the full natural gas production cycle (from
producing to gathering to shipping, storing, and marketing
natural gas liquids).
About 60% of the company's cash flow, which comes from natural
gas and oil production, depends on volatile commodity prices.
The balance comes from the midstream business, which churns out
relatively stable and predictable cash flow. Also, since
midstream profit margins improve when natural gas prices
decline, the company's diverse operations provide a natural
hedge against volatile natural gas prices.
The trust has continued to expand through acquisition. A few
weeks ago, it announced a $508 million deal to buy one of the
largest crude oil pools in Western Canada. The company says the
purchase would boost the trust's reserve base by about 40% and
be accretive to cash flow. Despite the aggressive acquisition
strategy, the trust maintains a healthy balance sheet, with a
debt-to-equity ratio of less than 1.0.
Speculation that trusts like Provident could become takeover
targets as we move closer to 2011 also may be pushing the shares
higher. For now, though, Provident has said it sees itself in a
strong position to acquire rather than be acquired. Only time
will tell.
Action To Take ---> For
yield-starved investors with a strong tolerance for uncertainty,
we believe Provident is one of the more attractive Canadian
income trusts.
Good investing!
Carla Pasternak
Editor
High-Yield Investing
http://www.StreetAuthority.com
| To
receive in-depth guidance on today's leading income investing
opportunities each month, plus access to several model portfolios,
please subscribe to Carla Pasternak's premium newsletter -- High-Yield
Investing. |
Carla
Pasternak draws on a variety of financial backgrounds to make profitable
calls on income-generating stocks for her readers.
Carla has
been employed in the investment industry for more than two decades. In
addition to her work as a writer for several other nationally recognized
financial publishers, her previous experience includes a position as
President of a well-respected investor relations firm. She has also been
writing shareholder reports for public companies (annual reports,
speeches, corporate profiles, slide shows, etc.) since 1980.
A highly
successful investment analyst, Carla specializes in high-yield,
income-paying stocks. In that pursuit, she's always mindful to select
companies that not only pay rich dividends, but that also have the
potential to deliver strong long-term capital gains.
On the
educational front, Carla holds both MBA and Ph.D. degrees. When she's
not watching the market, she's teaching business courses at the college
level and managing several million dollars in portfolio assets.
|
|
Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
actually helps some investment or another.Your investing life can
get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
|
|
|
