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. 

The two royalty trusts in our Focus List pulled back after announcing disappointing production and distribution numbers. Although we anticipated SandRidge Permian Trust’s (NYSE: PER) fourth-quarter hiccup, SandRidge Mississippian Trust II’s (NYSE: SDR) shortfall came as a surprise. In this issue, we update our valuation models and buy targets for both stocks.

We also do a deep dive into our favorite capital equipment company’s fourth-quarter and full-year results and revisit our investment thesis for the stock–a name that stands at the nexus of a number of growth trends related to the end of easy oil.