Unlike last season the northeast prepared for this season:
I see demand is really up, coldest season since we can remember, but prices not so much.
January 15th press release (and my February broker statement) has the dividend as 100% "qualified" for tax treatment. However, as big cheese says, there may be a revision early April, so don't file your returns until you get the final word in April. (I have mine done and ready to hit send but will wait for April's revision. I may save more money.)
Spartacus agrees. You summarized the sword point very well. Now we can all go back to study for our PhD (Piled higher and Deeper).
No, I'm Spartacus, with an MBA in finance from a top business school.
Are we done laughing yet?
The numbers mean whatever the beholder thinks they mean because PGH had a 858 million non-cash impairment write-off. No joke, because of the huge fall from the price of oil. Meanwhile, investors look at this company's CASH FLOW, which in Q4 was good. So up 2½% cheers this morning.
Apparently not, it should have, but ERF dropped the other shoe. Now they are barefoot and ugly. This does not make investors happy. It looks like dead money unless a real oil rally occurs. The silver lining: when oil rallies ERF will be cash rich and ready to drill like crazy to take advantage of higher prices.
SA will have to play the trump card while it is still worth something. Their method of using water pumps to push the oil dome higher in the old field will not last as long as they imagine. (Oh, we're sucking water, let's say we'll cut production in June to firm up the price.) I smell a summer time rally.
Now is the time to buy more energy property. If they do a secondary it will be put to work buying more producing wells. Kind of like a REIT secondary to buy more income property. It sets a floor in the pps, a good time to buy shares.
The new lower 4.75% yield will not attract much income investment. Oil down big today, no catalyst until OPEC says they will cut production (in June?), while the 4Q results were fine, still, ERF is just another energy play stuck with whatever the market says.
As I said, "normally a div cut gets hated". The price action today says many investors have sold after the initial relief rally. Early buyers today got shaved 4%. With a cut investors ask, "What is the history of restoration when commodity pricing returns?"
I hold a few energy stocks and now they all have done about the same div cut, and they have all had pps move up when they announced the cut. I've been investing for over 32 years and I cannot recall such pps up moves with dividend cut announcements. Mr Market has a strange sense of humor. Yes, I know all the arguments, strengthening the balance sheet etc, but 'normally' a div cut gets hated.
Pre-market has pps up 3%.
ERF didn't have an excessive yield a year ago,
and now once again it has a cautious dividend yield : ^ (
Got my 2014 1099 and MHR-PD tax treatment shows it as a qualified dividend. Maybe the company is paying with 'profits' and will not treat the dividend as a non-dividend distribution. I'll wait until April for the final word.
A look at the one year chart shows a double bottom. This thing is going back to $4 a share. From there it could easily tread water for some time until oil demand grows up again or another catalyst moves it off the $4 plateau. Thoughts?