Crius Energy Trust Tr Unit CRIUF

RE:RE:RE:RE:research note

[Sukhi19]

1. I will draw your attention to slide 31 of the Analyst day presentation. In Dec 2017 , 2 million units will be left in lock up. Out of which  8% are held by Non-insiders which works out to 160,000 units. These units will not cause a major problem.

2. They had said that P/O ratio should come down to 58% with the latest acquisition. Even if we take Afzaal's projections to be true, P/O ratio will still hover around 65% which is very healthy and; with very low debt load, should indicate that investment should be safe. Regular distr increases mean that they will not get in to difficulty in a hurry and things are under control.

3. Slide 32 of analyst Day presentation says, " Current distributions hedged out to 2018 with floor exchange rate of C$1.34 per US$1.00" which means currency hedging is in their favor and should be able to off-set other minor setbacks.

4. However, the trend at present is not healthy. So far, today ANON is mostly on BUY side which indicates that the concerted effort to pull down the unit price could have abated. It opened on a postive note today. But it is hard to predict the future course. It may hover around $8.75 till Q3 results.

5. Holding seems to be the best option at present. If it stays below $9 till Oct 17, I will definitely consider adding below $9 with the distr money as I see nothing seriously wrong with Crius. They have excellent management with a super CEO.