Frustrating action indeed. CFX up a palsy 2% on a distribution rise of 10% and a big day for the markets including MERC or UFS up close to 6%.
I have extensively researched the Canadian income funds/trusts space for an income portfolio I manage and I dont know anything else
yielding close to 19% as CFX does now. And that includes LOTs of companies with way UGLIER balance sheets than CFX´s.And with distributable cash per unit of $0.88 for the last quarter, distributions could still go up some going to year end.
At 14 bucks and close to 3 bucks annualized distribution, my conclusion is market must be expecting pulp prices to collapse hard starting tomorrow.
So yes, if we can think pulp prices are more in a plateau than at a peak, this is a f*** it, lets hold and collect situation and they will come to us sooner or later. Which I find perfectly easy to do for an income oriented portfolio but not for a growth oriented like mine, so I will switch some into more TMB
Another issue I can come up with CFX-UN is that it has gone up so much from just a year ago or so where it was at 2 bucks that it makes it an easy sell button to push, either on a panick day for the markets or on a bull like today when one might feel like easing up on the slow movers and chasing up hot stocks.
Interested to hear other´s comments around these issues. Nuts?
AI
