I notice with amusement an article in Forbes – “Five Canadian Trust Survivors“, where the author basically states the following will still give out “solid” distributions after distributions are taxed in 2011:
Baytex Energy Trust (BTE.UN)
Cineplex Galaxy Income Fund (CGX.UN)
Vermilion Energy Trust (VET.UN)
Brookfield Renewable Power Fund (BRC.UN)
Keyera Facilities Income Fund (KEY.UN)
There is only one good that can come out of this article: it saves you the time from having to bother even looking at these companies. Just scratch them off your candidate list – if Forbes magazine is extolling the virtues of these companies, then it is a virtual guarantee that you are likely to be paying fair (if not greater than fair) value.
I wonder how many people actually base their purchase decisions on magazine articles such as these.
I have spent the greater part of the day trying to screen income trusts, and I don’t see any exceptional value out there. The only one (and literally one out of the forty or so that I took a detailed look at) stinks so badly that even I have no idea how their business can be made viable, but at least their market valuation is trading such that they think this company is going out of business really soon.
Dunno about Forbes — a lot of times yes, it’s someone pumping so they can dump, and it’s not just Forbes.
I do know this beyond question. I’ve been trading BTE in 1 to 2k share blocks, buy on dips, sell on peaks and by golly am up almost 30k this year alone doing that. Sometimes I get the dividend, sometimes not, it’s not that big a deal compared to sometimes making two 10% profits in one month just trading the stuff. Divvies and it usually goes up — look at a year worth of that chart. If you’re beating that — you’re doing darned well.
When trading, not getting the dividend is preferential since capital gains are taxed less than income is… if it’s an eligible dividend then it’s usually a wash at the high marginal rate.
Anyway, congrats on being able to swing trade the thing. Nothing beats “buy low sell high”, eh?