Dominion Resources Black Warrior Trust (NYSE:DOM)

CAPS Rating: 2 out of 5

The Trust is a grantor trust formed to acquire and hold certain overriding royalty interests burdening proved natural gas properties located in the Pottsville coal formation of the Black Warrior Basin, Tuscaloosa County, Alabama owned by the Company.

Recs

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Player Avatar TSIF (99.95) Submitted: 7/12/2012 1:49:55 PM : Underperform Start Price: $6.99 DOM Score: +6.14

Dominion Resources is swinging in rather large swings after it finally broke down from $10 to $7. The Trust has a lifespan of 6-7 years at best with declining production. Gas prices would have to go up significantly for investors to get their "money back" on dividends before this expires worthless. Who wants to "just get their money back"? And who wants to need natural gas prices to go up to do it.

Playing the $7 down to $6.30 or so cycle for the second time. New bagholders will spike this near dividend payouts or if NG prices oscillate upwards. Overall, however, it will "win out" in CAPS, maybe more than once.

If you are playing Trusts for dividends, look for those younger in their cycle.

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