The Bush Brothers

OK - Here’s a somewhat speculative purchase for the month of January: LRT

LRT - “LL&E Royalty Trust”

Courtesy of Yahoo.com:
“LL&E Royalty Trust operates as an investment trust in the United States. It holds net over-riding royalty interests in oil and gas properties located in Alabama, Florida; and in federal waters offshore Louisiana. The trust also holds a 3% percent royalty interest in approximately 400,000 acres of The Louisiana Land and Exploration Company. LL&E Royalty Trust was formed in 1983 and is based in Austin, Texas.”

Because this is a Royalty Trust, there is a Profit Margin of over 90%. The past 3 years have showed increasingly positive Net Income Applicable to Common Shares, hence the 5 year dividend yield has been ~13.5%.

Unfortunately (or fortunately for patient speculators ), LRT’s most recent SEC filing stated that there would be no dividend paid this month (January 2006) due to owner asset damage from hurricanes Katrina and Rita. Although there was a dividend distributed in December 2005, the price of the trust has dropped nearly 50% since the hurricanes due to the uncertain amount of time before the damage is repaired and the royalties resume once again.

How much do you pay for a royalty trust which may or may not pay dividend this year? Right now, ~$3/share +/-. Based on some comments of the Trustee, there were housing issues for workers on the Louisiana rigs that needed be corrected before full production could resume.

I’m not an insider, so I’m speculating that most, if not all revenue streams will be restored and strong dividends distribution will once again resume from the trust once all the uncertainty is removed.

This could be a good entry point if your stomach and portfolio can handle the uncertainty…

Any information about LRT or other possibilities would certainly be appreciated!

Cheers,

Michael