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Penn West Petroleum Ltd. Message Board

  • olenkakatia olenkakatia Mar 1, 2008 11:50 AM Flag

    Question for knowledgable on Friday's trading

    From Forbes article "The second part of my thesis focuses on institutions. The majority of NYSE-traded shares are held by American institutions, including hedge funds. During the sharp market downturn in January, some hedge funds found they were facing a cash crunch and needed to liquidate positions immediately. It appears that Canadian trusts were among the securities that were dumped onto the market at whatever price they could fetch. On Jan. 22, when Pengrowth shares fell to as low as $13 on the NYSE, more than 3.6 million units changed hands (volume in Toronto that day was 1.5 million). On a normal day, Pengrowth's trading volume on the NYSE is between 500,000 and 800,000 shares, so it is obvious that some big institutional positions were being sold off. With U.S. retail investors still suspicious of the trusts and reluctant to fill the void, the price plunged. It has recovered to some degree since, but remains well below the 52-week high of $19.85 reached last July."

    The article says hedge funds have been in the trusts including PWE. On Friday some hedge funds(CNBC)had margin calls and were forced to lquidate municipal bonds which drove the whole maket sell off. I wonder if Friday's PWE sell off was from hedge funds liqidating a position in PWE. Odd trading in that PWE opened higher on a very small volume trade (manipulated) and then went down in a constant down slope. Anyone knowledgable on "trading" have any thoughts on Friday's trading?
    Thanks

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    • margin calls do drive down the price of whatever is sold off, I've watched my own liquidation (not PWE) drive down a stock by 25c. imagine selling 100's of 1,000's being sold off by any institution wanting to stay viable or even in a forced sale to stay legal financially. No one under these situations cares about a dime or a quarter or even a dollar in price. they just liquidate at market.

    • << There is no means of avoiding the final collapse of a boom brought about by credit expansion >>

      I agree and that is what we are in now - a down turn correction.

    • What he said is that it sure seems like it although we haven't had two consecutive down quarters.

      I have acknowledged here that the economy is ill,,,,but at this point I am not ready to concede to a recession.

    • Are you predicting another Great Depression as in 1929?

      That one lasted throughout FDR's three terms and did not end till after WW II, in 1945.

      Ouch !

    • Canroys are always more volatile than other stocks. My own belief is that mostly individuals own these for income. As soon as a wiff of bad news comes along,or like Friday, a market downdraft, the weak hands jump ship. Also, I don't believe that this stock has fully digested the Vault and the Canetic mergers. I think many of those investors who received PWE shares are selling, as they don't have the same confidence that PWE shareholders have.

      In any event I am buying more on Monday and looking at this temporary dislocation as a buying opportunity. As the previous poster stated, Q1 will be great.

      • 2 Replies to mlpnewby59
      • Canadian oil trusts do trade on dividend and as
        a result attract income investors this analysis
        was done by Fairholme Mutual Fund which led them
        to sell 7 million shares -part of the year-end
        PWE selloff!

        However I will take my chances on PWE yielding
        14% this year versus a stock market this year that
        will be lucky to breakeven!

        Warren Buffet stated in his just released annual
        report that investors can plan on no more than
        7% annual return over the next ten years!

      • mlpnewby59 wrote
        "In any event I am buying more on Monday and looking at this temporary dislocation as a buying opportunity"


        I'd be damn careful about doing that. In case you haven't heard we are in a very bad bear market and PWE will not buck the downtrend.

        It won't be very long in the near term where you will be wishing for your RETURN OF MONEY instead of return on money.

    • Well I was buying ,first quarter report will be very good!

      I am always baffled by immediate sell-off in oils
      {depression is coming I guess} in a fantastic market
      for natural gas and oil!

    • The day before, 21 million news letter recommend a strong buy. Maybe they wanted to get out at a higher price.

 
PWE
2.07-0.03(-1.43%)May 22 4:02 PMEDT