Looking at the market cap to net book, a number of the trusts have increased net asset value through takeovers in the last few quarters, and at the same time floated share issues and used the proceeds to pay down long term debt. The interest charges have also come down significantly so many will save millions of dollars of interest expense,...all is not lost :-))
A much touted trust, AET.un is trading at 1.49 book currently, while NCF.un is trading at 1.18 book and PWI.un at .95 book and VKR.un at 1.8 book (interesting to note that VKR.un is highly touted as well by certain ANALysts). The analysts seem to be touting the more highly priced stocks, while turning thumbs down to the bargains, using this method.
As pointed out on another thread, net asset values can be somewhat misleading as the assets of companies that just took over companies reflect the higher oil and gas prices of the quarter the takeout occurred. Most trusts have had such takeovers in the last few quarters, so the prices might still be compared without fear of too much distortion.
Other relative measures of comparison have changed for the better as well. Production per share, debt per share, assets per share, interest charge per share etc., have improved in many cases. Most trusts appear to be applying conservative management techniques to their business, by lowering debt and decreasing costs as we enter the trough of the current cycle.
One contributor on this thread does have a good point. If your outlook is 5 years or more, it is likely that the trusts are well priced now to set up a buy accumulation program and make regular purchases every month or so. Few other stocks pay you so well to sit and wait for the next peak in pricing.
Any other trusts someone wants a calculation of market cap to net asset value on,...I'm looking for cheap buys too. |
