Yesterday, 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.
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?