Topic: How To Invest

Pat: Both Bonavista Energy Trust and True Energy Trust have recently announced substantial asset purchases or sales. Do these change your opinion of them? Thanks.

Article Excerpt

As we mentioned in a recent Stock Pickers Digest Hotline, True Energy Trust, $0.76, symbol TUI.UN on Toronto (Units outstanding: 78.5 million; Market cap: $59.7 million), plans to convert itself into a conventional corporation by late October 2009. The trust recently sold the bulk of its oil and gas assets in Saskatchewan for roughly $86 million, which it put toward its debt. True’s long-term debt now stands at $110 million. That’s still a high 184.3% of its market cap. But the trust reported cash flow of $10.5 million, or $0.14 a unit, in the latest quarter. This will let it keep paying down debt and maintain production. True suspended its monthly distributions earlier this year because of falling energy prices and difficult credit markets. True Energy is still a hold. Bonavista Energy Trust, $18.77, symbol BNP.UN on Toronto (Units outstanding: 124.0 million; Market cap: $2.3 billion), plans to raise $421 million in a share issue to help pay for its $694 million…

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