Portfolio Update: May 2011

Here?s the monthly portfolio update for the BTI portfolio which consists of 2 accounts: a TFSA account and a Non-Registered account.

The TFSA is currently holding the following stocks (May 31 closing prices):

(A Tax Free Savings Account is an account where your capital gains are exempt from taxes)

tfsa snapshot for may 2011

Market Value: $9,519 + $6,635 in Cash = $16,154

The Non-Registered account is currently holding the following stocks:

non registered  account snapshot may 2011

Market Value: $8,700 + Cash: $1,350 = NET: $10,050

BTI Portfolio Value: $26,204

YTD Results from January 1 2011

TSX at start: 13,443 @ May 31: 13,802 Change: +2.67%

BTI at start: 24,926 @ May 31: 26,204 Change: +5.12%

M/M Results from May 1 2011

TSX at start: 13,945 @ May 31: 13,802 Change: -1.02%

BTI at start: 25,748 @ May 31: 26,204 Change: +1.77%

HELOC Portfolio Performance

The HELOC portfolio is basically a non registered account with money borrowed from my home equity line of credit. *Please take note* that this is money I can afford to lose. The impact of losing this money would be equivalent to skipping a lump sum payment on my mortgage for 1 year. 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:

HELOC snapshot may 2011

I did not post the graph for the YTD ROI for the HELOC portfolio because it is showing an incorrect value. The bank is using a final value of $39,710 from May 27 while my portfolio closed at $40,252. I noticed that the performance tool updates on a weekly basis. The ROI should be:

HELOC at start: 36,094 @May 31: 40,252 Change:?+11.52%

For the record, my outstanding balance on the HELOC is now $23,500, so basically I am up about +$16,762 so far if I sell everything at the closing prices above.

heloc margin usage may 2011

Monthly Review

The past month has been a rollercoaster when it comes to stocks, I am glad the juniors have partially recovered. It is clear that for my TFSA and my non-registered Questrade accounts nothing much is happening as SkyWest energy dictates the returns. SKW recently had their AGM and released a new presentation reiterating what I have been saying all along: there is nothing wrong with the company and this management team will deliver, they have the assets and the experience. All of a sudden ?investors? realized that SKW can reach 2000 boepd by the end of the year and hit 3000 boepd in 2012 which explains why the price woke up. If I didn?t hold so many SKW shares in my account I would have kept on buying when it hit the 40s but call it risk management, can?t put all the eggs in one basket.

I also ended up buying more Hyperion Exploration shares and got my average down to $1.18 for a NAV of $1.35 that should increase substantially by the end of the year. My bid to add HYX to my TFSA failed as I only got 1,000 shares filled at the 52 week low of $1.08, that?s a shame as I would have loved to grab the full order for 5,000 shares.

Perpetual Energy released its Q1 results and cut its dividend by half, for the second time. I wonder why didn?t they just cut it so much in the first place, I would have loved to see the dividend canceled altogether for the next 18 months. Remember, I have always reiterated in my stock picks page for PMT that the dividend should NOT be the reason to invest in this company. PMT is asset rich and needs the cash to develop these assets; they will need time to turn a 25,000 boepd gas weighted company around so income investors should have been looking elsewhere for their income. Now that most of the income investors have moved on, time to invest in growth by increasing the liquids weighting and developing the gas storage business. PMT will require patience and for me it is a long hold so I am fine with it being dead money for now, I will not sell at a loss knowing the company will be just fine in the end.

I also bought NAL Energy this past month (TSE:NAE) and it tumbled after releasing its Q1 as well because they cut their guidance and missed on their production due to weather related delays, third party plant outages and higher natural declines. BUT the company has 3,500 boepd behind pipe awaiting tie-in and beyond these issues; the fundamentals for NAL remain sound. I am praying for the price to hit the low $11 so that I get to buy more because in my opinion the stock will go back to $14 in the future paying me 7% while I wait. This is great for a company that is levered to emerging plays such as the Cardium, Viking and Wilrich.

Because we are at a crossroad in terms of QE2, I will be very flexible with my holdings; given that most of my margin is in use, there might not be any sacred cows even though I do my best to pick fundamentally solid and promising stocks. I am very satisfied with my double digit returns on the HELOC and optimistic about the YE results no matter how it turns out in June and July as long as we still have some semblance of a recovery underway.

How is your portfolio doing so far?

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