Stock Trades: Sold Avenex Energy

buy-or-sellYesterday, I sold 2,000 shares of Avenex Energy (TSE:AVF) from my HELOC account.

In at $5.60, out at $5.63, profit= +0.25% after commissions & excluding dividends.

Trade Commentary

My average price for AVF is high given the market we are in. Natural gas prices have corrected significantly yet AVF has not been abused so far. I have a feeling AVF’s price is simply supported by investors looking to capture February’s dividend which will only last until ex-dividend where the stock will get its share of beating. While I like AVF, the upside potential in price appreciation is very limited but the downside is open given its natural gas weighting of 50%. How much am I throwing away? For now, just the dividend of next month ($90) which is a small price to pay if it means buying back in when the price corrects substantially in the next few weeks. Avenex has been a great dividend payer which returned 10% in dividends in the last months. Obviously, this is not profit taking just hedging the downside. Call it indirect market timing if you wish since I plan the reestablish my position as soon as the opportunity presents itself and in 2012 I bet there will be more than one!

What do you think?