May 20, 2005
SpeculatingStocks.com Stock Pick: Enterra Energy Trust (EENC)
Stock Price: $19.73 (long-term strong buy)
Enterra Energy Trust is engaged in the drilling and operation of oil and gas wells in western Canada. It is an open-ended unincorporated investment trust with the primary goal of issuing trust units as well as acquiring and holding debt instruments, royalties and other interests.
Enterra Energy Trust distributes regular dividends to shareholders on a monthly basis. The May 2005 dividend was just announced at $0.15 per trust (share) unit. Investors have until May 27th to invest in EENC to receive this upcoming dividend. The record date is at the close on May 31st.
Due to increased oil and natural gas prices, EENC experienced record results in the first quarter. Q1 revenue increased 49% to $24.5 million, yet even more impressive earnings increased 84% to $3.5 million over the same period a year ago.
EENC trades in an interesting pattern, it usually trades down at the beginning of the month after each monthly dividend release, then EENC recovers and climbs higher going into the future dividend release. Each distribution usually leads to EENC hitting a new 52-week high.
The is a long-term play, but can also be traded month to month as the dividend hits. EENC has held its general uptrend even as oil has dropped to $48 a barrel.
SpeculatingStocks.com Target Price: We expect EENC to reach $30.00 within the next 4-8 months. It seems more lucrative to trade in and out of EENC.