Is CPG still pricy?In the last 5 trading days CPG went up from a low of $40.35 on Jul 14 to an intraday high of $43.81 today. Will the move up last?
The rise started when CPG confirmed on Jul 15 its monthly dividend ex Jul 27. This may alleviate concern that their dividend payout is not covered by earnings, $.56 this year. A BNN guest pointed out that energy companies don't pay their dividends out of earnings. They pay it out of cash flow and this company has a growing cash flow.
The rise accelerated when ARN revealed on Jul 15 that Crescent Point purchased more Arcan shares to a total of 19% of the total issued and outstanding common shares. ARN management believed the CPG accumulation together with the other transactions relating to the Beaverhill Lake light oil resource play, announced in Crescent Point's news release issued on July 14, 2011, as providing further evidence of the significant light oil development potential in the Beaverhill Lake zone in the Swan Hills area. This demonstrates that other leading industry participants are following Arcan's lead in evaluating and undertaking significant capital expenditures in the area.