All / Portfolio Changes
I made a few changes in my oil and gas portfolios today.
The major change involved selling my holdings in Bonavista Petroleum. Nothing wrong with the company -- they will continue to shine among companies in the Canadian oil patch. I just thought it was an opportune time to take profits. My portfolio is loaded with companies that saw their shares rise to good levels, and then fall back. I view these companies in favorable light also, but should of taken profits and bought back in at lower levels. I guess we all can say that. But, in my case, I had foreseen where the market was going to in relation to share performance of companies in the oil and gas industry and, stood idlely-by without reacting ahead of the moves. I stayed with these companies for I feel they will be the better performers when the market environment improves.
Bonavista shares were bought at $5.70 and sold at $9.00. Shares in the company have been among the better performing stocks in oil and gas, despite the ugly scenario for the industry as a whole. I just didn't think shares would remain strong and would eventually react in relation to market sentiment. Also, I didn't feel there was much upside from the current price. I will be watching share performance over the near term with objective of re-entering at an opportune level.
I also dumped two oil based holdings, both losing situations in terms of profits and losses for me. Probe Exploration, once on everyone's recommendation list, was sold. Took a huge hit on this one, fortunately - I didn't hold too large a position. Fourth quarter results don't appear encouraging to me. As all are probably aware, they are in a cash crunch and I am concerned with future operations.
Also sold off my Upton Resource holdings. I continue to like the company, but see shares falling to lower levels. Because of the oil pricing, I feel the shares will into the $1.20-1.25 area (3X 1999 est cash flow), at which point I would rate shares a buy. This is a well managed small company, their problem is being a dominant oil producer.
I used the proceeds of the sell transactions to accumulate additional shares in companies already in my portfolios. There was one exception. I added Post Energy to my holdings. I feel the company may turn out to be one of the better performers in 1999. The picture related to added production, reserves, cash flow are favorable and coupled with modest debt, should be reflected in share performance over the near and longer term.
Al R will be updating my portfolios and he will be adding my current thinking in terms of rating the holdings as buy-accumulate-hold. |
