Example of a Good Buying Opportunity?
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I read this article in the paper on the weekend and it struck me as one of those potentially good buying opportunities that come about every once in awhile:
Teachers’ Plan Sells Off Nexen
CALGARY — The Ontario Teachers’ Pension Plan is selling off 7.5 million of its shares in oil and gas company Nexen Inc. The block of shares currently held by Teachers will be sold at $54.25 per share “as part of a normal re-balancing of its portfolio.” Nexen stock has traded in a 52-day range of between $23.55 and $60.67. The shares closed at $57.46 Thursday on the Toronto Stock Exchange.
The result of this sale resulted in the stock dropping by $2.01 on Friday. Nothing fundamental about the company changed. No drop in earnings. No loss of a big customer. No huge lawsuit. Simply one of the company’s largest holders rebalancing their portfolio as a result of a huge gain made on the stock over the past year (the shares have doubled).
For a long term investor, I believe that these types of drops provide good opportunities to make an initial purchase or add to an existing holding – this of course is assuming all the due diligence has been completed and the investor is comfortable with the fundamentals. As I have not done my DD on Nexen, I am going to pass.
3 Comments on this post
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justasking said:
Hi there,
What do you make of the agf dividend income fund? How does one evaluate a fund liek this? What to look for? Thanks.
http://www.agf.com/t2scr/static/app/fundview/public/en/fund799.jspSeptember 26th, 2005 at 10:45 am -
The Dividend Guy said:
I had a quick look at this fund and it is clear that it is very focused on financials. Most dividend income funds tend to be this way since banks pay good dividends. To evaluate this fund, I would suggest checking out http://www.fool.com/seminars/spp/index.htm?sid=0022&lid=100&pid=0000
- it gives a pretty good overview on what to look for when evaluating funds.
The thing to keep in mind, is that these dividend income funds tend to be very similar to one another, so a focus on low fees would be prudent to be sure you are not overpaying. Make sure you check out http://www.iunits.com and their financial based index fund as a comparison. Good luck with your decision.September 26th, 2005 at 3:21 pm
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