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Investing Topics: Royalty Trusts

06/27/14: Good Stocks on the Rise

We review some of the emerging themes in Canada and Australia's energy industries, raise our buy targets on several names in our International Portfolio and swap one laggard for a long-term winner that could benefit from a near-term upside catalyst.

Staying Focused

In the previous issue of Energy & Income Advisor, we reviewed the performance of our Focus List in the second quarter and the first half of 2013 and made a few changes, swapping out shares of marine-seismic provider Petroleum Geo-Services (Oslo: PGS, OTC: PGSVY) and small-cap contract driller Pacific Drilling (NYSE: PACD). Our high-grading of the Focus List continues.

Trusts and Hedges

There remains a great deal of confusion and misinformation about US trusts and how to value these securities.This misunderstanding often leads to mispricing, giving savvy investors opportunities to buy high-quality royalty trusts at attractive valuations and elevated yields. No two royalty trusts are alike, so investors who sort through filings and quarterly reports can identify the best values.

At the same time, unwary investors who gravitate toward the highest-yielding names with little regard for underlying fundamentals can and will get burned.

We prefer names that are in the early stages of their life spans and have the potential to grow their distributions in the near term.

  • Live Chat with

    Elliott and Roger on Dec. 1, 2014

  • Portfolios & Ratings

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    Experts

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Peter Staas

      Managing Editor: Capitalist Times and Energy & Income Advisor