Portfolio Update: March 2012

Here’s the monthly update for the BTI portfolio for March of 2012. The HELOC portfolio is basically a non-registered account with money borrowed from my home equity line of credit. I will use the bank’s “Performance” tool for the monthly results when possible because it takes into account deposits and withdrawals. On to the results:

stock portfolio snapshot

stock portfolio performance

YTD Results from January 1 2012

TSX YTD performance+3.66%

BTI YTD performance+13.60%

Monthly Review

There goes my 20% target for Q1 thanks to the sharp drop in price of Marquee Energy. Energy stocks in March began selling at the mid-point of the month and I am glad I was a disciplined seller since the beginning of the year even though I almost regret selling my DTX shares so early. The takeovers of NAL Energy and Reliable Energy certainly helped as I sold both once the deals were announced. However, I was not so lucky in recovering much money from NAL Energy as it was hopelessly far from my breakeven point of $12. My plan was to add for NAL during the year if it dipped below $7 so when the takeover was announced, it was time to exit and balance the year’s gains with the loss from NAL. All in all, a ROI of 13% is still great when compared to the TSX.

Spring breakup is in full swing and now is the time to patiently wait for the good buying days (when investors throw out the baby with the bathwater). Is your shopping list ready? I have a pretty good idea on mine and with the recent dispositions, reserves are on standby scanning for the right opportunity. Among the few stocks I am holding ONR stands out like a sore thumb as it is my only heavy weight NG producer. I should have sold ONR many weeks ago but at the time my circumstances did not allow me to keep a close eye on the market. But all is not doom and gloom, two things stand out with ONR: the company has a very low cost of production which means it will survive low NG prices and the stock makes a great tax loss vehicle for the year if I choose to sell.

Eagle Energy Trust is not even on my price watch list. As long as oil prices are high, the company will be paying me one distribution after another at least for the next 3 years. Neither is Xtreme Coil Drilling which will be rewarded later in the year as it exhibits excellent growth in cash flow. XDC is exposed to oil and liquids play in the USA which protects it from increased pain levels I expect natural gas producers  to go through this summer.

Even though Marquee Energy dropped 30% in 1 month, I am keeping my shares as a core holding. I will have a lot to say about MQL in an upcoming post. Hyperion Exploration can’t seem to develop a premium valuation, the price simply faltered come breakup. For both companies, I believe it will be only a matter of time before they will be recognized. The show me attitude the market is exhibiting towards these 2 will change sooner or later (looks like later). This is particularly true for HYX once it reports its Q2 results which will show stellar growth in average production compared to last year. When investing in energy stocks, one has to be patient and equipped with solid nerves to ride the ups and downs. As long as I know clearly why I invested in these companies, I have no problem holding until the end result proves me wrong.

How’s your portfolio doing so far? Have you bought any stocks lately?

9 comments to Portfolio Update: March 2012

  • Like a Swan

    MQL has been a big disappointment…still holding as a big loss but sort of like where things are heading (but then again, same feeling back when it was SKW…). It’ll probably take a couple Qs for the mkt to have confidence in them, assuming they execute, but if they do, there should be a dramatic re-rating of the co.
    Have you considered buying the ARN.DB.B debentures for the income and exposure? 6.5% and slightly above par now

    Here’s my watch list: ARN, PRY, WCP, and possibly PWT

    Let’s hope for a quick break-up this year.

    • Mich

      MQL requires patience and I totally share your disappointment but right now most energy stocks are faltering as we entered a seasonally weak period. What I like about MQL is the fact that the CEO supports the company with market buys and has a lot of skin involved. Wait on it, I have a feeling they will over-deliver on their guidance.

      I am watching ARN and PRY as well, add TOL & RPL to the mix. WCP is a great stock expected to spin a dividend at some point in the future. I do not follow PWT, but I should probably consider the DB of ARN as well.

      Here’s hoping for a quick breakup and thanks for your feedback!

      Cheers,

  • Johnpyyc

    Hi Mitch:

    I am trying to follow your calculations but am having trouble. Also what happened to PXL on the list? I concur it is a nailbiter with MQL but the leadership is strong.

    Keep up the good work.

    J

    • Mich

      Hi Johnny,

      I sold the bit of PXL shares I had in this account on March 8 but I still have a core position in other accounts. For PXL, the Q3 report will be its best catalyst while MQL will move prior to that once they prove they are on track for fast growth in oil weighted production.

      At this point of the year, it takes patience.

      Mich

  • 13.6% is pretty good if you ask me. If you can keep making that you are doing great.

  • [...] Beating The Index with ‘Portfolio Update: March 2012‘ [...]

  • I agree with Miss T, 13.6 is pretty solid if you ask me! Always enjoy your calm, cool review of your portfolio. Encourages me to keep my emotions and nerves under control. Thanks!

    • Mich

      Thanks Buck, chances are ROI will be sub-10 on my next update as the market has sold off pretty good since then. That’s the ups and downs of the market!

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