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Mesabi Trust Message Board

  • gmax97 gmax97 Oct 19, 2011 12:15 PM Flag

    Delayed reaction?

    Did someone get their calculator out and realize that MSB is way undervalued? A 5.5% run up midday? I tend to agree with Jduade, this should be 30 plus or minus a few cents either way. The good news is the higher price per ton.

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    • Seems that way. I hadn't been planning on adding more MSB but when the price on Monday was flat after the unexpectedly large distribution increase, I couldn't resist adding a bit at pre-announcement prices.

      I have seen similar delayed reactions elsewhere. A few weeks ago QRE announced their distribution. Although they kept the Q3 distribution unchanged, they pre-announced a 15% increase in the Q4 (February) distribution. The unit price was flat for the first day after the announcement, then jumped about 15% a day or so later. Hard to believe, but it almost does seem that sometimes the news takes a couple of days to become known.

    • It looks like short covering to me. Yes, the valuation is clearer now that the distribution was announced but such a sharp rise (10% at the time this is being typed) on relatively high volume looks more like the die hard shorts getting out ASAP.

    • A nice move up today. I stick to the guess that we'll see MSB move up towards $30 into the ex date. At the current price of around $26.70 a $1.12 represents slightly over a 4% yield, or close to double the yield on the 10 year. At $30, a $1.12 is still a healthy 3.73%!

      Given that last years Q4 distribution was weak (only .65), I'd think that there's ample chance that MSB could run into the mid 30's by years end as long as Europe doesn't implode. Time will tell, all I can say is I'm holding on till Q4.

 
MSB
20.37+0.26(+1.29%)9:49 AMEDT

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