EGL.UN.TO - Eagle Energy Trust
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Thread: EGL.UN.TO - Eagle Energy Trust

  1. #1
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    EGL.UN.TO - Eagle Energy Trust

    I hold this stock, bought in around at $9.94, it's currently at 11.25 right now and pays a healthy divided. When I bought it I really didn't have an exit strategy, i was just planning on letting it drip for the next few years, and sell when I need the money for other things (it's in my TFSA). But currently, I do have a 12.8% gain on it, and not sure if I should just sell and take my gains, or just continue dripping it.

    Any thoughts on if this stock is overvalued, just right, or still has legs would be appreciated thanks!


  2. #2
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    A 13% gain on an equity is really peanuts.

    I would continue to hold it unless either it no longer fits the criteria that lead you to the stock or something better came along and this is your worst holding. I would usually dissuade selling any issue unless you definitely thought it was either now too high and due for a pullback or you had something better to buy and this is your worst holding.

    You have to remember that selling winners too early is the most common mistake made by investors.

    If you really wanto to protect most of your gains set a stop loss order at 10.93 or so.

  3. #3
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    I also bought EGL.UN at 9.90 and with same reasons as OP I also think that when you DRIP you get discounted price. I'm not going to sell as yield is excellent and company has no debt ... also I noticed that if it one or 2 days down, next day it will go up even stronger.... I'd like to add to my position, but I hold it in TFSA and I'm out of cash....

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  5. #4
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    Make a plan and stick to it... Reasons for selling may differ but just because it had a quick run I would not sell unless you know it is going to have a pullback or you know longer want to own the company... In your initial post you seem not to want to do either but have just experienced a blessing of a short run up. Be glad you bought it when you did and sit back and enjoy the ride. If you had planned on holding it for a few years and sold now I am almost certain the return in 3 years will be much higher than 12.8%. Like PMREd mentioned unless you have a better place to allocate those funds or intend to rebalance your portfolio then the reason to sell is only fear of not locking in a profit. I own this one as well, however at a higher price, but I bought it for the yield and a potential spike in the price of oil. If oil goes parabolic I may sell, otherwise I plan to hold for a long time. Buying is always easier than selling.

    Cheers

    Edit: I am currently going over the company's 2011 financial information. Most of the news is quite positive. One thing that I have potential concern with, which Chigu and gibor probably are not concerned about, is that 60% of its holders have chosen to DRIP their distributions. To me that would equate to a share dilution of 5.598% this year(60% X yield of 9.33%). Is a 60% unit holder DRIP outrageous? Is this a cause for concern for me? Currently their payout is 50% on an $88 WTI price so there should be some room for dilution and either growth in assets and revenue or an increase to distributions. In the short term this should only spur growth but long term it could be an issue. At what point should I become worried about the dilution through DRIPs. Obviously, if the company were to pay out the funds as distributions the cash would be gone but at what point does it effect the value of my shares?
    Last edited by londoncalling; 2012-03-26 at 09:36 PM.

  6. #5
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    Like PMREd mentioned unless you have a better place to allocate those funds this is exactly the point! What I gonna buy if I sell?! I like also LNV, was trading it last year, now it's going down, but I'm not sure that LNV will do better than EGL (who has also twice higher yield)...

  7. #6
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    If I hold this stock in TFSA, is there any tax I have to pay?

  8. #7
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    Quote Originally Posted by 604_Snooze View Post
    If I hold this stock in TFSA, is there any tax I have to pay?
    By Definition a TFSA is a (TAX FREE savings account), so you don't even have to worry about taxes on dividends or capital gains etc. No bookeeping required. I hold it in my TFSA, and synthetically drip it.

  9. #8
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    why EGL.UN dropped sharply today..? looks like Q3 financial results were not bad…
    http://www.theglobeandmail.com/globe...11080910142001

  10. #9
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    EGL.UN announced sale of Permian Properties for $US 140 Million and discontinue Primium DRIP (no diluted shares anymore) ... Thus, book value jumped, guys have a lot of cash to cover 16% dividend.... What is your opinion?
    https://www.tdwaterhouse.ca/markets-...kets/index.jsp

  11. #10
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    Quote Originally Posted by Chigu View Post
    By Definition a TFSA is a (TAX FREE savings account), ...
    Point of clarification ... the TFSA is Canadian tax free ... which for a Canadian stock/trust, means tax free.

    A US dividend paying stock on the other hand, is Canadian tax free but the last I read, it still subject to the US gov't/IRS 15% withholding tax on dividends.

    There's been some rumours the Canada/US tax treaty would be updated to add the exemption the RRSP enjoys in this respect, but so far, I haven't seen anything saying this has happened.

    Cheers


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