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Friday, May 1, 2009

About my next investment: Energy Savings Income Fund (SIF.UN)

Pengrowth Energy Trust (PGF.UN) and Pembina Pipeline Income Fund (PIF.UN) are both great, but I guess adding another company to my portfolio cannot hurt. Since I do not have that much money, I prefer to diversify my investments in different companies. It makes me feel more confident about me, my little money and my investments.

I had been thinking about Energy Savings Income Fund (SIF.UN) for a while now. I will soon take actions – but not before my next paycheck, which will be next week. Last Wednesday came that good news for SIF.UN with the acquisition of Universal Energy Group. I was expecting a major boom around SIF.UN after the agreement was made, but it was actually not the case. On this last Friday, SIF.UN was loosing 2 cents to close at 12.48$. But why? Shouldn’t be the complete opposite that should happen?

I am never going to understand the stocks market.

Another good example of the non-sense of stocks market: on April 29th Pembina Pipeline Income Fund announced an agreement with Talisman Energy Canada to acquire its Cutbank Complex midstream gas gathering and processing facilities. Fantastic! And I was expecting a major BOOM around my wonderful PIF.UN. But it’s quite the opposite that happens. Pembina Pipeline Income Fund value is now down of 63 cents to be now at the value of 13.45$ per stock. I will be surprise to see the price false down under 12$ – which is the price I purchase units of PIF.UN back on March 13th of this year.

In both case, 2 super great companies had announced acquisition. After what, their value haven’t rise.

The stocks market definitely does not make any sense at all!


Unknown said...

Generally the rule of thumb on acquisitions is the acquiree increases in value on news of the sale and the acquirer drops in value, unless it is just overwhelmingly obvious the deal is winner. It's generally thought that acquisitions create a risk for the acquirer since they have to successfully integrate the new operations into their system without messing up the company they bought.

Over time once details of the deal become available and it appears the integration of the purchased company is going well, the market will recognize the value.

Sunny said...

Thanks for the useful comment.

Imagine if most investors will have my kind of reaction!

Wouldn't be awesome? LOL

Ben Moreno said...

I see you invested in Pengrowth. I have been wanting to do that for awhile now. I think I will soon. I own shares in HTE Harvest Energy. Great monthly dividend stocks if you ask me.

HTE did cut their dividend recently but I think it is only for one month to catch up.

Hey your blog is a great idea. You can use it to help you stay focused on your goals. Thanks for the inspiring comment on my blog.


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