when the price of oil increased dramatically, PWE share price barely budged. Now that oil has dipped a bit, we go way down. Many have said there is no correlation to PWE and oil price. If this is the case, why are we dropping so much. Is it a concerted effort by short sellers? Some have said that PWE is sold to meet margin calls elsewhere. That doesn't seem to be a good argument because the share price of PWE hasn't increased that dramatically to make it that profitable to sell. Others say it is just general market conditions, that PWE will naturally fall in a falling market. That doesn't seem to be a good argument either because PWE has fallen more than the market. Moreover, the price of oil will remain high for years to come and our bottom line will continue to be profitable. Others say it's the tax liability issue that kicks in in 2010 that is weighing on the share price. That issue has been discussed an infinitum on this board for a year and it seems not to be an issue for the company has stated that it has enough revenue to pay out the dividend for years after 2010. The question then is, what is going on with the price drop each day if it is none of the above? And, in these financially troubled times, who would not want to invest in a company with such a great guaranteed dividend each month?
"Guaranteed?? Guaranteed?? "
As close to a guarantee as you can get in the stock market. They hedge their prices to maintain (at my last calculation several months ago) about 40% of the distribution, & the rest is sold on the open market. They declare what the distribution will be for the quarter & state their goal for the yr. Why do you think we have been able to go on a buying spree of other companies & still maintain the distribution?
Stocks ALWAYS slide more quickly in a Bear market than they rise in a BULL market. I see no confussion here at all. We will have to find a bottom and base for awhile before having SUSTAINED upward movements.
Since June of '06', PWE's divy rose only about .02 per share per month. The reason why is because they are holding back a lot of their earnings for when the tax change comes. They will continue to pay out long after the other canroys stop. This is the only answer, IMHO.
Very excellent question which I would also like a sound answer to. The drop today is dramatic again and where can the bottom be? Wish I had a crystal ball to get the answers but I wonder the same things you do.