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San Juan Basin Royalty Trust Message Board

  • alaskasalmonfisher alaskasalmonfisher May 12, 2006 10:56 PM Flag

    OT - IC4X - re HTE

    IC4X - Is it yet too soon for you to have an opinion of the quality of the new HTE management? Granted, they have not had but 2 months so far of putting together the merged companies. But there seems to be a dichotomy of opinion as to what's going on - agrossfarm (well respected, myself included) continues to maintain that HTE is one of his largest trust holdings, and that the merged company will succeed. Others on the other hand say they see too many similarities to the old Viking management style. There seems to be consensus that the market is undervaluing HTE right now due to management uncertainties. Either HTE is a real good buy now (or in the upper 20's), or the market is predicting a weaker HTE in the future, in which case one should take heed now. Your thoughts are always appreciated. AKSF

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      See if this link opens for you, it is RBC's 5/12/06 report on HTE. They rate HTE as Sector Perform, Average Risk with a price target of C$35 or approx US $31.50.

      So for RBC, HTE is about fairly valued. I own HTE in both my margin account and IRA. I started buying HTE in Feb-04 and my average cost basis is about $15. If Alan Gross likes it, you can't go too far wrong. I like it because of a 77% oil weighting and would like to own a little more in my IRA and would add more if it falls below $30, there looks to be good technical support between 29.60 and 29.90.

      Other Canroys I also like: CPGCF (also over 70% oil)--- and PEYUF because it had a bit a disappointing production quarter and has been dropping of late, and, has something like 18 years of reserves --- wait on PEYUF to see if it drops even more, NG stocks may be weak for a while because of high storage levels, no read yet on how the Summer will be in terms of electricity demand, and we don't know yet whether the GOM will get whacked again this year by hurricanes. Same advice re: SJT, it is looking very weak technically, it could slip under $37 real easy.

      • 4 Replies to ic4x
      • Thanks. One thing I notice is that HTE may be quoting its POR in a much more conservative way than almost all other Canroys - I'm beginning to follow along what some people are saying. If other Canroy POR's were calculated the same way HTe calculates theirs, they would be higher than HTE's. I can't quote the numbers yet but that's what I'm reading. Learning to work w/the numbers in the company reports is challenging.

      • For what it is worth, CIBC seems to be on the same page as RBC with regard to Harvest.

        They have a $34.50 Cdn price target and rate it sector performer. Their assessment is that "To date in 2006, Harvest has done an impressive job of integrating Viking's asset base...."

        We purchased it from Feb to May of '04 and "sleep well" with it.


      • I have a question about your buy point for HTE. Would it be the same if the Canadian Dollar were at .85 or at .90?

        For a stock like HTE which I own, while I watch technicals some, I am primarily interested in the yield and sustainability. At 31, and the CD at .90, the yield is 13.23% (assuming full recovery of WH). I find that very attractive, both absolutely and relatively. As to sustainability, with the bulk in oil and the recent results there is a substantial cushion. Therefore, if I didn't own it I'd buy it now. I respect your views and methods greatly and you may get in cheaper by your methods. But for me with income stocks, technicals take a back seat to yield and sustainability. I'd rather not take the risk that it never reaches a lower price if the current price is damn good. Just a slightly different take with utmost respect.

      • ic4x:
        I don't understand the TA stuff very well, but a check on StockTA does not seem encouraging. There is only ONE support level with a confidence of only 2. The trend is clear.

        Thanks for the tip. I've moved my limit orders down to 36.50 & 36

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