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American Capital Mortgage Investment Corp. Message Board

  • jtrader64 jtrader64 Mar 26, 2013 11:57 AM Flag

    OT - CLMT SPO

    For those interested, CLMT (an MLP specialty refiner) is doing a SPO. Priced it at 37.50. 5.25 million shares plus 785K works out to be about 9.6% of their 63 million shares O/S.

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    • Jtrader (and others), are you still considering making a bullish options play for CLMT's potential run to ex?

      If so, what's the main criteria holding you back from pulling the trigger in the near term?

      • 1 Reply to turbofever
      • Turbo - I am long the shares on this one.

        I've looked at some option plays but we are trading at 37.40 and the 35's and 40's are what is available. On these dividend run plays, I like to either short the puts (or a put spread) for the month prior to ex (in this case the April's) or go long the calls for the month that expires after the anticipated ex (in this case the May's).

        By the way, the idea on the short puts is to short say the April 40's here. CLMT starts to run into the April OPEX. If it is 40 or higher, you are done with the trade and keep the premium. If below 40, you get put the shares and hold them for the rest of the run.

        I looked at both the calls and puts but decided to just go with the shares as nothing was standing out for me. If you can get the May 35 calls for a decent price, that looks like the best way to play this to me.

    • CLMT is a good company and is well diversified. It's on my watch list, but I'd rather wait to see if I can get it closer to $32. LINN at under $35 or VNR at under $27 would be good too. The pipelines are all too expensive right now and you'd need a crash to get a good deal in those.

      • 1 Reply to waynesonnen
      • Waynesonnen - you may get some CLMT at 32 at some point but the play here is that you have stock running up in a hot sector, in a strong market that will be going ex in early May. They do a SPO, giving you a 4.5% discount.

        A SPO going into ex in a month is giving you a high probability for recovery. No guarantees, just a high probability over a the next month.

    • Calumet is talking about a fleet of Great Lakes tankers to haul Baaken liquids.
      I saw some big ships mothballed in Buffalo that could be fitted. Anybody in this with me?
      Rats.
      I knew I'd have to go it alone.

    • Thanks for the heads-up on this (and on the AGNC forum, which I check more frequently).

      Are you playing it w/ calls (May 35's perhaps?)

 
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