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Mesabi Trust Message Board

  • allard.dennis allard.dennis Nov 21, 2012 3:19 PM Flag

    MSB average annual distribution (dividend)

    Annual distribution assuming a purchase price of 30 by calendar year, past five years:

    2012 - 8.6%
    2011 - 8.0%
    2010 - 8.0%
    2009 - 2.4% (market crash of fall 2008)
    2008 - 9.6%

    (MSB never reached 30 before 2008)

    Annual distribution assuming a purchase price of median price that year by calendar year, past nine years:

    The following chart shows actual distributions per calendar year, median price of MSB that year and the % payout if you bought at the median:

    (sorry for the variable width font size - blame Yahoo for that)

    year div price - return
    2012 2.60 25 - 10.4%
    2011 2.42 30 - 8.4%
    2010 2.39 25 - 9.6%
    2009 0.71 10 - 7.1%
    2008 2.89 18 - 16.0%
    2007 1.16 20 - 5.8%
    2006 1.76 20 - 8.8%
    2005 1.36 17 - 8.0%
    2004 0.78 10 - 7.8%

    At purchased price of 22 (today's price) the payouts above would all be above 10% (except post crash year 2009).

    Obviously if you bought below the above median price your return would be higher for that year and if you bought above the above median price your return would be lower.


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    • Between MSB and SCCO, both I hold with low average price per share, the dividends are pleasingly large this quarter.

    • I added during this decline because of the overdone selling. Its virtually impossible that the trust would ever eliminate its quarterly distribution. This is a flow of income from one of the richest iron ore deposits in the world with excellent shipping access for export. Technically there was a selling climax in the shares and time will tell if it will continue but the drop off in the trading volume Friday is a good sign. If there is some short selling involved, there may even be some panic buying seeing that the decline has ended. During November from a high of $28.20 to a low of $21.51, the decline represents 2 1/2 years of distributions at the current rate - certainly out of proportion. The investment returns at the current market price for the shares would therefore be that much more exceptional. I expect at a minimum a 50% retracement of the current decline to approximately $24.50. Depending on the overall disposition of the stock market, I'd give it till February for that to happen. There may be some end of year tax loss selling left in it to give that much better an opportunity for additional ownership.

      Sentiment: Buy

      • 1 Reply to mexcom
      • gutowskido Nov 24, 2012 10:26 AM Flag

        The amount of export from the Mesabie mines in minimal, unless you consider shipping to Quebec as export.. The export market will be assumed by the two new Canadian mines (New Millenium and Labrador Iron Mines). They will ship out of Sept. Illes which has a deep water dock that will accommodate large ships to carry ore to Europe, India and China.
        Quebec can also be supplied by larger ships from Sept Illes. The US mines can only carry around 26,000 tons per ship thru the Soo and Welland locks.
        MSB will supply the US market and a few of the Canadian steel mills that are near the Great Lakes.
        Watch the Automobile production and the need for steel in rebuilding our deteriorating infastructure to determine the consumption of Mesabi ore.

    • Past performance is no indicator of future performance.

4.30-0.40(-8.51%)Feb 5 4:02 PMEST