I am now down 51% on this stock. What now? Does anyone (except Beefstu) have any intelligent advice or comments? The last purchase I made was at
$ 24. Does "never try to catch a falling knife" apply here? Looks like that is exactly what I did. I have been "gritting my teeth" and holding on? Another foolish mistake?
He bought it for the yield then, and it was good enough to buy. He's got the yield he expected, but now realizes he could have waited and got a better deal. Who could have known? That's life, but he made a decision on that yield, and nothing has changed on income. All you can do is make the best decisions on the basis of the information you have at the time. It happens to everyone, but the Market will once again love the stocks they now hate. It is very fickle and irrational.
Fund managers make 90% of trades. When one sells in an Industry, the others have to do it too, or they risk that their averages could fall below the index of the Sector Funds. They can't risk that, so they all do the same thing. When they're selling, it usually a good time to buy.
Now what....Why don't you just simply take a "good" tax loss, and rebuy all (or at least 1/2) of this back after all this settles (around May)? - I can guarantee you will reap the tax "profit" by doing so, save you a lot of stress (or dental fees by "gritting [your] teeth" -lol), and re-think this investment (no sooner 30 days as per IRS rules) definitely AFTER we know how bad NRGY's distibution cut is going to be(and at least see its ultimate direction....up or down, down, down) - G.L.!
<<Why don't you just simply take a "good" tax loss>>
I always sell a loser before it turns into a 1-year loser. Even in my tax deferred and tax exempt accounts. It did not work out, it is a piece of paper, get rid of it. What looks best now? Something you lost money on? Unlikely.
Hi you are not down the dividend is still the same so far. The downward trend is only if you want to sell, or wait for it to come back up again which it will, and if the winter is colder next year. The stock will go back up also. Be patient.
Cash out and buy FGP instead- the distribution is not in question of being cut...
No salt mines, storage facilities or pipeline build outs...
FGP is into acquistions of other propane distributors.
Why store with all the new nat gas frakking coming online- propane should be readily abundant to flood demand - I think distributors will be the beneficiaries as the auto-conversions hit the markets. The tank exchange may not be just for grilling soon...
I sold my Nrgy @ ~18. @ minimal loss.
Went into FGP @ 18 to capture the recent distribution. Down a little at this point but feel secure in the blue rhino and mass distribution network.
No way will I come back to Nrgy with distribution cut on horizon, removal from the index, and catering to nrgm unitholders with any extra cash through increasing that distribution rather than the nrgy unitholders.
Just my thoughts.
Was surprised to find a Merrill Lynch (February) report listing a $22 target price and a BUY rating on NRGY. Analyst assumed a 7% yield (after drop.) Said there had been an overreaction to anticipated drop in yield and that challenges were fully priced into the stock.
Report mentioned management's "missteps"; called NRGY a turnaround story; liked midstream and NRGM; thought turnaround had good chance of success.
I realize $22 doesn't sound very positive to someone who bought Inergy when it was in high $20,s or even $30's--but it's about 35% upside from today's share price.
Lisa is right about tax consequences for long term holders in taxable accounts. Even if you neglected to file a few of those pesky K-l's, the IRS requires "allowed" AND "allowable" to be added back at sale.
Doing some searching, I found http://www.investorvillage.com/smbd.asp?mb=5028&mn=19266&pt=msg&mid=10441984
What that added is that box 1 carryforward losses will offset the ordinary income. That may not be so important with NRGY with its positive box 1 amounts of late, but it could be for many MLPs.
Once I got all of the way in, I found that link. That was shocking-- how much the ordinary gain was.
If I had held those shares in an IRA, I wonder if the ordinary income would correspond to a UBTI hit. Now that would be scary. I doubt that would be the case, since you don't hear people reporting they got nailed like that.
I was also interested in the proration aspect. I had thought that some things only took effect once you had sold all of your shares. I guess that was for MLPs that have had a string of box 1 losses, and NRGY reported a lot of gain this year.
I guess I have more study to do. Thanks again.