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Ship Finance International Limited Message Board

  • rbgambler99 rbgambler99 Mar 21, 2012 4:07 PM Flag

    UAN making a move....

    Time to get back in? I sold mine at $30.

    Stagg?

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    • rbgambler...I saw where UAN is making a run...farmers will use a lot of nitrogen (N) in the next 70 days on their crops and the price on UAN may be reflecting that...

      I will probably keep waiting for SDR to be offered and maybe transfer funds from SDT to purchase it...

      I am still working on my 2011 taxes, I would rather drink red eye whiskey and chase wicked women than do taxes....! $tagg...!

      • 3 Replies to staggman99
      • Stagg. I think RNF is a better fert play. Nat gas to remain low for a long time and it may be a cheaper input material than pet coke.
        It will announce first div soon and does not have Ichan turmoil.

      • stagg,

        There's another royalty trust coming public tomorrow -- WHZ. This one is sponsored by Whiting Petroleum which previously sponsored WHX. The projected first year distribution is $4 and the expected offering price is between $19-21. Look for the pricing amendment tonight. The red herring prospectus is available on the SEC's website. It is mostly oil (Over 80%) and they have collars in place on oil until 2014. Unlike some of the latest trusts, this one is not structured for tax purposes as a partnership so there will be no K-1 (the tax reporting will probably be on a 1099 MISC) but it will have some of the same issues as the Sandridge trusts in that some of the income will be treated as production payments and taxed as interest income.

        The first distribution is payable at the end of May and the first quarter's income flows through to unitholders (instead of being pro-rated).

        I don't have any experience with WHX but others have noted that the distributions dropped off on WHX after a few years. Unlike some of the other trusts, the term on this is determined by the total amount that they pump, so it is truly a wasting asset. Nevertheless, that first year yield is bound to catch some attention, plus act as a call option on oil. Once the first quarter distribution is declared (probably in April), the annualized yield should start to be captured on Yahoo Finance. Plus there will likely be Seeking Alpha articles comparing it with the SD trusts.

        One other point. Many holders of SDT and PER may be selling those to raise funds for SDR when it comes public in April so they might come under pressure. The targeted distribution for SDR are disclosed in the prospectus. I think the second year's distribution target is $2.80ish so SDT and PER would have to decline to get to that yield, but one could do the math. Susan could tell us if it makes sense to sell some puts on PER and SDT to take advantage of the selling volatility that is sure to come.

      • LOL...I gave up doing mine years ago.....I found that the experts save me way more tax than when I did them myself! And, I had more time to drink and chase wicked women!

 
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