# Are Hex and FRU too Risky to Buy?



## dogleg (Feb 5, 2010)

Both of these stocks are tempting but I haven't bought any royalty oil stocks. Any opinions as to whether there is any more risk in it than any other oil play like SU for example? Thanks.


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## bettyboop (Dec 13, 2011)

I'm also wondering and would appreciate any comments.


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## londoncalling (Sep 17, 2011)

*What to do about FRU?*

I am very interested in adding FRU to my portfolio. I have read up on this stock on other forums and I think that other than the obvious difference volume, price and yield this stock has larger spreads. As a stock the business would be similar to AW or BPs but in a different sector. I like the business model as it seems to have a large amount of properties and less inputs in comparison to other O + G companies. I think it is a little over priced currently but the yield is fairly attractive. I put in an order on Friday for FRU but it never came down to my price. Does or has anybody owned this one?


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## gibor365 (Apr 1, 2011)

dogleg said:


> Both of these stocks are tempting but I haven't bought any royalty oil stocks. Any opinions as to whether there is any more risk in it than any other oil play like SU for example? Thanks.


don't get why do you place HEX and FRU in 1 basket?! 

HEX is like index ETF (just with covered calls), imo will a little bit underperform XIU, but higher and monthly dividends.

I was looking at FRU, AVF and EGL for some time, at the end decided to buy EGL.UN about month ago -> more promissing growth, no debt and better dividends


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## londoncalling (Sep 17, 2011)

I like that EGL has 100% US exposure as I am currently lacking exposure to US energy. The only thing holding me back form buying EGL is that it has a limited history. I already hold LNV which has limited history. I have been watching EGL since you first mentioned it. I may have to go back over the numbers between the two and make a decision. I'll also have to decide when to buy.


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## doctrine (Sep 30, 2011)

FRU isn't paying any taxes yet - their deferred tax deductions will run out next year or shortly after and their distribution will be lower, unless oil prices increase by 30-40% by then (always possible). And they have a pretty big depletion rate problem as well. A lot of this I suspect is built into the price although it has run up lately.


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## gibor365 (Apr 1, 2011)

londoncalling said:


> I like that EGL has 100% US exposure as I am currently lacking exposure to US energy. The only thing holding me back form buying EGL is that it has a limited history. I already hold LNV which has limited history. I have been watching EGL since you first mentioned it. I may have to go back over the numbers between the two and make a decision. I'll also have to decide when to buy.


I also had LNV , bought 9.8 sold several weeks after 10.57 + 1 dividend. I like this company, should've buy again when it dropped below $10, but instead bought another stocks.
I don't remember if I published before,...here is interesting analisys of EGL.UN

http://www.beatingtheindex.com/eagle-energy-trust-a-dream-come-true-for-income-investors/

Fo US oil/energy imho the best play is COP , I'm trying to add shares on every small dip.

P.S. I think you mentioned before CHE.UN , i also started watching this stocks, even placed a limit buy that never got executed, and it goes higher abd higher...


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## londoncalling (Sep 17, 2011)

Perhaps a better time to pick up FRU would be later this year as the tax depletion will become more apparent. Stock price should go down if they cut the distributions which is a possibility as stated above. Fundamentally that shouldn't change anything other than share price, distribution and yield. It would just mean that the gov't is getting my money before I do. 
I had noticed the recent run up. Hard to say if that was due to the rest of the market being bullish or not. I don't like the media attention that EGL has been getting as of late cuz IMO it only means temporary price appreciation. I also am concerned about the P/CF. What I do like about EGL is the beta and the P/B. I will definitely have to keep researching before I pull the trigger.

I took an original position in CHE about 9 months ago and have added to it a few times between then and now. It has recently climbed but I don't think I will sell this stock even if it goes higher. I am currently heavily overweighted in this position but my yield on cost is too high to let it go as I would just have to take a chance on something else. I have had bigger winners over the past year but on fundamentals this is my fav holding thus far. I would agree that its price appreciation may not make this a good buy right now.

I bought into LNV about the same time as you did and was trying to choose between it and PBN. Whoops!

If I recall we were both trying to deploy some DAY money.


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## gibor365 (Apr 1, 2011)

I sold PBN at $16.42 last year with losses, when I hit 6.42 at fall, I was happy I sold it, but now who knows.....I almost at my selling price and I'd be getting dividends.... I never know what should i sell and what should I keep


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## londoncalling (Sep 17, 2011)

Buying and selling is the thing I love/hate most about DIY investing. Since I am still a newb and I realize even at $4.95 fees can eat into returns with a small portfolio I don't trade positions that often. Also, I have yet to flesh out my selling strategy. For now, I just use mental targets and reevaluate. I know that I should probably start using stop loss orders for protection but I have found with all the recent volatility I would have sold many positions that I would not want to lose and the price would rebound in a hurry. I am still in accumulation mode so I can keep throwing money at the market.  I must admit I have a hard time sitting on cash. I am getting an itchy trigger finger and will need to pull the trigger on a buy soon. I was hoping the Greece thing would be decided this weekend but alas, more political delays. In a sense I think the result is priced into the market and it seems to be a bullish spring and presidential election year which is also good for the market. Perhaps, I'll throw out some stink bids and see what I can get this week.

Cheers


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## gibor365 (Apr 1, 2011)

londoncalling said:


> I know that I should probably start using stop loss orders for protection but I have found with all the recent volatility I would have sold many positions that I would not want to lose and the price would rebound in a hurry.


This is the point! I sold some positions on stop loss orders, and let's say half of them were good and half of them bad. With stop losss of 10 or even 15% I'd sell a lot of positions last year include CDN banks , SU etc that already rebounded.... the same with G, but I didn't sell when I was sharply down and than G rebounded and I sold even with profit.
So, for me a big dillema, to sell and take losses or to average down and wait for rebound


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## gibor365 (Apr 1, 2011)

londoncalling. what is your opinion about BA? Very conservative stock 52 weeks range 25.21-29.19 , now trading $27. Dividend yield more than 7%. 
I just don't understand their EPS, as per TDW it's $-4.79 , but if I go to Earning tab on TDW for 2011 their EPS is + 1.49


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## Argonaut (Dec 7, 2010)

*BA*: You could call this one a Jim Morrison stock. "The future's uncertain and the end is always near". Wireline business; with *gasp* plugged in telephones.. ugh.. it makes my money scared just thinking about it. Other Jim Morrison stocks include anything to do with newspapers, print, and other forms of old media. Ask YLO.

Go for the parent with the greater share of smartphone and internet exposure, BCE. Of course, Telus is even better but most of you guys are easterners and maybe wouldn't agree.


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## londoncalling (Sep 17, 2011)

GIBOR - I looked at BA but would have to agree that this stock is continually getting bad news. I absolutely would listen to Argo on this one. Buy BCE, T, or RCI instead. I am even apprehensive of Telcos at the moment but think I need to grab one for diversification.

Currently energy stocks are hitting a seasonality period of high strength and this can be further spurred by the "Iran" situation. I would like for a pullback before buying another energy stock but i don't want to miss my chance. Since it will most likely be a long term hold it may not matter as much. 

ARGO - I am a huge doors fan and loved your most fitting explanation of these kind of stocks.  Let it Roll Baby, Roll!

http://www.youtube.com/watch?v=Sf9soeYILDQ&feature=fvsr


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## gibor365 (Apr 1, 2011)

I just was screening dividend stocks and came accross BA. Generally I don't really need telecoms as I already have RCI, BCE and T:NYSE they are about 10% of my portfolios.
The sectors where I really underweighted: Industrials and Utilities.
I just not familiar with Canada industrials at all... on US side poping up names like: EMR, RTN, LMT, RPM, WM 
want to research them a little more... My first criteria: yield at least 3% and consistent dividend payer


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## stephenheath (Apr 3, 2009)

Dogleg, if it's specifically energy you're looking for you might want to look at HEE over HEX... I haven't held it that long but it's done better than HEX for me in that time.


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## KaeJS (Sep 28, 2010)

gibor said:


> I sold PBN at $16.42 last year with losses, when I hit 6.42 at fall, I was happy I sold it, but now who knows.....I almost at my selling price and I'd be getting dividends.... I never know what should i sell and what should I keep


I sold at $15 if it makes you feel better.


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## al42 (Mar 5, 2011)

KaeJS said:


> I sold at $15 if it makes you feel better.


should have held on and collected the nine dividend. Touched $16.50 today and will go higher IMO.


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