Yesterday, I picked up 500 shares of Perpetual Energy (TSE:PMT) at $4.84.
Stock Trade Commentary
I’ve doubled my overall position in Perpetual Energy with this purchase. So far I am holding 500 shares in my HELOC account and the latest 500 are in my non-registered account. PMT is currently yielding 12% in dividends. There is a reason for this high yield and usually it indicates the market is expecting a cut in distributions on the way which I don’t mind if it is already priced in.
Even though I was complaining not long ago that I sold DEE because it was gas weighted in a low natural gas prices environment, you will be surprised that PMT is even gassier than DEE. However, PMT has major game changers that can shift the balance such as proving their Cardium lands and their gas storage business. To be honest, I still would like to talk with the company and get a feel of things which would confirm my hold or push me to exit the position. PMT’s hedges will be running out by March 2011, will they be able to stabilize their cash flow by executing their game changing plan or is a dividend cut inevitable before then?