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MV Oil Trust Message Board

  • cpa38 cpa38 Jan 25, 2011 11:40 AM Flag

    Hedge Fund Toy

    Now that the hedges are off and this thing trades right along with the movement of oil prices, MVO is going to be a play toy of hedge funds to bet on the price of oil. The daily movement is going to be wild and the daily trading volume significantly higher.

    One thing Mike and David could do however to cut down on MVO being used to speculate ... go to monthly dividend payments instead of quarterly. That would cut back on some of the shorting activity around the stock.

    MVO is still slightly overvalued on a DCF basis. I was stupid to not have exited in the low 40s. Costly mistake. We won't see that price again. And 20s are possible over the next couple of weeks.

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    • I took a dividend of .945 ( $3.78 annually ) for 62 payments at a 7% yield and got a price of just a hair under $36/share as the present value of that stream of payments.

      Oil prices wont be that steady, but there is pretty good support for buying here. 10 year Treasuries are 3.39%. 361 BPs over the 10 year with the possibility of upside.

 
MVO
6.20+0.09(+1.47%)Jun 24 4:02 PMEDT