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  • Digg it UP - Three Key Factors to Oil and Gas Investing

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    t’s impact on the oil stock will not be what the investment community forsees.

    2) Trust Unit versus Common Share

    There are a significant amount of oil and gas stocks which have converted to become trust units. The main purpose of these o

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    Oil and gas investing begins with the investor determining what oil and gas stocks he should invest his hard earned cash into. While some will focus on oil and gas stocks which yield a higher return on investment opportunities like oil sands stocks and Canadian oil stocks, we feel that you should begin by reviewing the following key three factors:

    1) Is the Oil Stock Over valued?

    This is probably the first question you should ask yourself as a lot of oil stocks are more hype than actual value. A good indicator of an oil stocks value is the oil stocks price earnings ratio. If the price earnings ratio is greater than 20, we would suggest you further investigate why the oil stocks price earnings ratio is so high. If it is due to an aggressive growth strategy including a recent land acquisition or a large drilling program that is to take place in the future, attempt to determine the impact these events will have on the oil stocks earnings. In a lot of cases the future event’s impact on the oil stock will not be what the investment community forsees.

    2) Trust Unit versus Common Share

    There are a significant amount of oil and gas stocks which have converted to become trust units. The main purpose of these o

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    and Canadian oil stocks, we feel that you should begin by reviewing the following key three factors:

    1) Is the Oil Stock Over valued?

    This is probably the first question you should ask yourself as a lot of oil stocks are more hype than actual value. A good indicator of an oil stocks value is the oil stocks price earnings ratio. If the price earnings ratio is greater than 20, we would suggest you further investigate why the oil stocks price earnings ratio is so high. If it is due to an aggressive growth strategy including a recent land acquisition or a large drilling program that is to take place in the future, attempt to determine the impact these events will have on the oil stocks earnings. In a lot of cases the future event’s impact on the oil stock will not be what the investment community forsees.

    2) Trust Unit versus Common Share

    There are a significant amount of oil and gas stocks which have converted to become trust units. The main purpose of these o

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    tual value. A good indicator of an oil stocks value is the oil stocks price earnings ratio. If the price earnings ratio is greater than 20, we would suggest you further investigate why the oil stocks price earnings ratio is so high. If it is due to an aggressive growth strategy including a recent land acquisition or a large drilling program that is to take place in the future, attempt to determine the impact these events will have on the oil stocks earnings. In a lot of cases the future event’s impact on the oil stock will not be what the investment community forsees.

    2) Trust Unit versus Common Share

    There are a significant amount of oil and gas stocks which have converted to become trust units. The main purpose of these o

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    o an aggressive growth strategy including a recent land acquisition or a large drilling program that is to take place in the future, attempt to determine the impact these events will have on the oil stocks earnings. In a lot of cases the future event’s impact on the oil stock will not be what the investment community forsees.

    2) Trust Unit versus Common Share

    There are a significant amount of oil and gas stocks which have converted to become trust units. The main purpose of these o

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    t’s impact on the oil stock will not be what the investment community forsees.

    2) Trust Unit versus Common Share

    There are a significant amount of oil and gas stocks which have converted to become trust units. The main purpose of these oil stocks becoming trust units is to save and defer tax to unitholders. However, the distributions that these oil stocks (trust units) pay out require a significant amount of cash flow and therefore reduce the growth capability of the specific oil stock. Therefore if you are looking for an oil stock which will provide you with steady cash flow than an oil stock which is a trust unit is your choice. Whereas if you would like to hold an oil stock in your portfolio which has a high growth potential you should stay away from oil stocks which are trust units. This is because normal public company shares usually do not pay out large dividends to shareholders as they prefer to reinvest their hard earned cash in their capital program. Oil and gas capital programs include purchasing land, mineral rights, drilling programs etc., all of which are more likely to generate shareholder value rather than just paying these funds out to unitholders.

    3) Natural Gas versus Oil

    Investors s

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