I offer this evidence that the shorts are covering.
This is good news. The fact that we are not going up is obvious they are getting help from the Market Makers maintaining the price until they can get covered. This gives further evidence that the Q3 earings are not bad, if they were the shorts would not cover until after the finacials came out.
Those that point out the slow rise in price are probably short sellers that would like to see you give up some shares. The more selling they can create the less management they have to pay for.
Short news, must read !! I have a large holding in AHR. On Friday when it went up on no news, I decided to take a 50% short position against my holdings, as sort of a hedge. When tryingto place the order, I was told by the brokerage firm that I was unable to short this stock, as they did not have enough held to short against, and the firms are policing the naked shorting rule now. This did not make sense, as I had double the ammount I wanted to short. Well, with more discussion, I found out that because I have a margin account, they can lend my shares to short, and that they are not there for me to short against. I opened opened up a new margin account, and changed my current account to a non-margin account. They will then have to call in the borrowed shares, and force the shorts to cover NOW. If we all do this, it will create a HUGE short squeeze!
I bought in when I realized that AHR mgmt had systematically eliminated their rmbs portfolio and moved to commercial and some overseas action. I keep adding. Dividends keep getting paid,and AHR seems like a survivor. I also keep adding RSO,NRF,and ACAS on the same basis. When AGNC hit $15/share I got into that one,too. The way I look at it, I'll either be eating well in retirement or having to eat ALPO a couple of times/day. Hey, our dog eats ALPO pretty well. So, if AHR goes down so will I!!
I was talking about the max yield you get with the preferreds is when you buy it -- ~40% now -- but if you buy the common now, 2-3 years from now with a 40c divie you'll be seeing greater than 40% yields on those shares you buy today.
Assuming no BK. So if you're looking at the 5-year horizon it's generally best to go for the common.
But in the short term a divie cut is not impossible -- BAC sure shocked the hell out of me earlier this month -- the big question about BK is how much the preferred's senior liquidation position to the common is worth. Seems to me that leverage can wipe everybody out even if the leverage is a lot less than FRE or LEH.
"Admittedly, the preferreds are more thinly traded, but one should expect the yields to be the other way around given the seniority of the preferred issues."
One thing I though of was that if the BK case is off the table, then AHR-C is stuck at 40% yields (until called to preferred heaven at $25), while if & when the common divie goes to eg. .35 that would be a 40%+ divie on today's close.
I believe they are going to cut the dividend significantly and that is why the price is not going up much. They issued new stock Apr 7 to assist in paying the dividend, they have not done that this last quarter. Without a good dividend the stock is not desireable. Just have to wait for a dividend announcement for this December. Use a little caution on this stock until more info comes out. Economy is starting to affect commercial real estate also. You see that do not have many people that are insiders that own this stock. IF it was such a good deal why are they not in it at this price! Use caution. Buy or Bail quickly on earnings announcement.
Management not cutting the dividend is not neccesarily the best thing for this company. We will see what their results are this quarter, but the dividend should be reduced if profits are falling. They are still going to pay out at least 90% of earnings so you know that the dividend will remain very strong relative to the stock price.
Right now the stock's price is factoring in a decent chance of bankruptcy. If the company is still profitable they could run themselves into the ground by paying out more money then they are making. Their assets seem to still be generating income for them, the most essential thing for management to do is show that they have enough liquidity and cash to continue operations. If they can do this, even with a dividend cut, I would expect to see a nice bounce.
I to am in at much higher prices. Obviously, if you were attracted by the stock at those prices it was because of its 18% to 20% yield and not because it was a capital gain machine.
Guess what, it still yields that much so you are not down unless you sell now. In a year, and it will take at least that long, this will be back to 10 where it should be. You can then sell and keep your 20% income return which was what attracted you to this in the first place. You don't get 20% yields on investment without expecting volitlity and that you may be stuck with it for longer than you hoped> You just accept that as what you are paid for.