Brian Acker, CAFording Canadian Coal TrustFDGSELLAug 22, 2007
A little convoluted because it is a trust and will be taxed in two years at 32%. The payout is larger than what they are earning. His model price is $35.40, a 15% positive differential. There are other stocks he likes better that have a better probability of making money than this one.
(A Top Pick July 2/08. Up 23.24%.) Acquired by Teck Resources (TCK.B-T). Bought the US stock, wrote an $85 Call for July and picked up about $3 on the Call.
Coal will be one of the alternative energy plays. Environmentalists are not very comfortable with it. Very good cash flow. Would buy the US stock and write an $85 Call for July and you should pick up about $3 on the Call.