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?
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.
rud, here's how I found it.
Go to the inergy website and click on the link for K-1 information. This will take you to the taxsupport website. Hopefully you have already registered to get your K-1 through that website, but if not, you will have to register, provide a password etc. Once you are in and select your K-1, on the lefthand side menu, there should be a link at the bottom of the list that says something like "Gain/loss" calculator. The link does not appear if you have already sold your units (I sold some out of my account last month and the link wasn't there for my account, but it was there for my other family member accounts that still own NRGY shares.) Good luck.
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.
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.