Picked Up Harvest Energy Trust

I bought some Harvest Energy Trust (HTE) today. Not a lot only 50 shares worth. The market is pretty volatile and historically the month of August is bearish for stocks 72% of the time (or something like that), but the recent 226 point drop in the market created a really good buying opportunity that I found hard to resist.

HTE is a canadian income fund that is taxed like a REIT is in the US. If it distributes a certain amount of its earnings, it doesn’t pay taxes at the corporate level. After trading as low as $27, it bounced back up. I was able to pick up the stock at $29.48. With a monthly distribution of CAN $0.38, that works out to an annual yield of 14.85%! (considering an exchange rate of $0.96 = CAN $1).

Even after you consider a 15% tax, thats a post-tax yield of 12.62%! Pretty hard to match that return. HTE produces heavy oil and also has a refinery. I doubt oil prices will drop substantially or demand will taper off, so I feel the long term prospects are pretty good. In the short term there are always fluctuations in the stock price, but there are good buying opportunities.

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