here are some data points. so far this year, XAODX is up 6.7% and AOD is up 4.3%. SPY is up 9.5% and EZU is up 2.4%. 90% of alpine's assets are in US and european stocks so alpine's NAV seems to be performing okay relative to SPY and EZU, they aren't beating the averages but they aren't really lagging either.
AOD hasn't done as well as the NAV as investors are probably a little hesitant to jump in on this due to the historic trainwreck of 2008-2012.
i went long AOD on jan 23 when the dividend cut was announced. since that time, the NAV (XAODX) is up 3.9% while SPY is up 4.4% and EZU is up 0%. only a two month timeframe but they've done pretty good against the averages with their total return almost 4% while euro stocks have returned nothing (euro stocks are about 40% of their portfolio). and AOD is up 5% since jan 23, using 4.12 for the current price of AOD. when i bought AOD i set 4.12 as my exit price but i'm going to continue to hold. the NAV has beat the averages (blend of SPY and EZU) for the last two months. that is a rare event for alpine, but it is only two months...... plus AOD is still trading at a discount of more than 13% against NAV. i think 10% is a reasonable discount assuming the NAV is flat to higher for the period. said another way, 10% discount is reasonable as long as they 'earn' the dividend they pay out.
i hope i'm not getting greedy but i'm going to hold and hope to see north of 4.20 as the discount approaches 10% (4.29 is 10% discount to current NAV of 4.76). i did put in a stop loss today at 4.05 so i may get stopped out if the market dips.
I am not surprised its held up for a couple months. AOD NAV usually holds up ok on the short term. The further out it goes it starts to drift downward.
I think your projections of possible profit is reasonable. But the market is giving AOD a discount because of its history. They reward a premium on NAV for quality. You'll need the NAV to rise or for AOD management to change. They could well be doing that but it will take time to prove it to investors.
I guess I have to ask... If the target profit here is 5% with a lot of things going against you.... there are better high yield and undervalued assets out there that has a lot more going for it
STX, SPLS, TCPC, ARCP, OHI, PSEC, SWY
i got stopped out at 4.05. got the feb div so got almost 4.08 btwn cap gains and dividend. i may buy back in but holding off for a bit right now.
remember my 5% 'profit' was for a two to six week trade (which ended up at 8 weeks and was less than 5% !!!!). some of the stock names you mention have decent yields but you'd have to hold for the entire year to get the dividend. if you held for two to eight weeks, you might not even collect a single dividend and would have to rely on capital gain.
the bottom line on my trade is what i hoped would happen did not happen. the discount didn't really close much (roughly 14% to 13%). while i managed a gain, it was mainly a result of rising stock prices (not narrowing of discount). take a look at BOE back in nov, it traded down to a 15% discount and was back to 10% within two months. i played that one (which also had a div cut) and it worked out - the discount narrowed. not sure why it didn't happen with AOD. maybe investors like blackrock more than alpine (which is understable given the history).
Hey Blue. You said pretty much what I was about to write, although you said it better and with more facts. To me, since AOD has become less of a dividend recapture alchemist, it is settling down. The dividend is no longer a driver. The discount to NAV is still large. I have a feeling that management is quietly backing away from the recapture nonsense and may be trying to save face. The dividend is still not justified, but not outrageous.
It is now just a stock to play, keeping an eye on NAV. I've bot and sold for a 40c and a 25c profit recently, and am currently long at $3.91 and am looking to sell again at $4.20 unless the NAV starts dropping big, in which case I'll get out at market. I'm not risking a lot on this stock and I never will again.
banker, i'm glad to see you are making some money on AOD. it is not an easy thing to do - although it may be easier now than before. as i noted in my other post in this thread, i got stopped out. if the market takes a dip, i'll likely buy back in as long as the discount is still 13% or so.