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Added to PVX

February 25th, 2009 Sphere: Related Content

I picked up another handful of Provident Energy (PVX: chart, web, Y!) late yesterday afternoon.  I believe the stock is way oversold, and has considerable upside potential, despite the reduced distribution.

This was a move to not only capitalize on an oversold condition, but also average down on the stock.  Buying at $3.00 per share helped bring my average cost down below $9.00 per share.  I’ll continue to monitor the oil and gas sector for more potential opportunities.  Canadian royalty trusts have been beat into submission, but the fundamentals of the major players remain intact.

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Investing, Royalty Trusts ,

  1. Winston
    February 25th, 2009 at 11:43 | #1
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    why are the fundamentals strong for these guys? other than obviously being oversold and having an opp to average down, i’d like a better reason for adding to pvx. any clarity would be helpful, thx.

  2. Grant
    February 25th, 2009 at 18:45 | #2
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    Provident is scaling back their exploration efforts quite considerably in favor of developing and maintaining existing production. They dropped their capex budget significantly, and the payout ratio is maintainable at these price levels.

    They’ve scaled back their U.S. stake in the patch, where costs to maintain production exceeded those in Canada.

    The company shouldn’t get caught short when the natural gas market starts climbing again, and I believe it will starting in early June. Demand for refined products is starting to increase, and will continue to do so through the driving season.

  3. Bostonian Hit Man
    February 25th, 2009 at 22:14 | #3
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    PVX is the best positioned of the canroys. AAV has an unsustainable business model and i think u will see payouts continue to decrease. Last divy cut by PVX should put them in a good spot until oil prices start going up again. Like u said in your previous comment, demand for natty gas will start going up too.

  4. Wil
    February 27th, 2009 at 08:30 | #4
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    PVX is being dragged down with the rest of the canroys, and does standout as one of the better led companies in my opinion.

    I agree w/ grant that the stock will start climbing early summer..

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