GOOD has another common offering today at 18.15 (from 18.75 close). IMO, any price under 18 = more than 8.33% yield, mostly tax deferred and a buck on the price.
No home run here, just safe yield if wrong, and a fast 3% to 5% if right.
Hey, it hit 18.26 last week. You cudda taken your 3% in a week if you bought on the offering. I can't predict a nutso macro market. I'll buy just about any equity reit at more than 2% below the offering price on launch day
I bought 2,000 at 17.65 on the offering and did not sell last week It goes ex 12.5 cents on 12/12, which annualizes to 8.57%, most of which is tax deferred roc. Yield is exactly 8% when price is 18.75. I'll dump this lot at 18.76 then wait for the next offering.
I made a killing off GOOD because I bought it in Feb/Mar 2009, and sold it at $18 in 2010, so I have it on my watch and it was the biggest decliner from my watched stocks. I picked up some.
I have had pretty good luck buying on share issues. A lot of times when a stock price goes down, you are wondering if there is something other people know that you dont know. With a share issue, you know why it has gone down, and its a non-event / temporary event.
I had sold out of PSEC in the low 11's, and then Psec did a share issue and the price went to $10.20 I loaded up. That paid off nicely. Unfortunately I sold out at $11, thought i did do some subsequent buy ins and sell outs after that for profit.
FSC was the last share issue drop I bought into, I beleive it was in september the share issue took the price to 10.25. Unfortunately that stock never did manage to recover back to the pre-share issue price yet. I am still holding.
I have picked up a few GOOD
Thanks for the heads-upon GOOD. I bought 100 shares in the 17.7's. I'll keep an eye on the 100-share position for six months to a year and then decide whether to keep buying.
I like this idea of jumping in on every REIT that has a secondary, because as you say the "dilution clowns" pile in shorting it excessively. I made a modest amount of money flipping AGNC on all its dilutions for a couple years. I always bought at 9:45 the day after dilution and sold in the afternoon for a 3 or 4% profit. I may start trying that tactic with every post-dilution REIT. I've never once lost money buying on post-dilution day.
Between pipelines and reits I've bought about 3 dozen over the past couple of years on the knee-jerk over a follow-on offering. I've made money on every one. Lemmings are lemmings. The dilution freaks are as reliable as the sun rising. They just can't or won't understand that 99% of these offerings are to fund accretive growth.
With respect to GOOD, they typically close on a new property with their line of credit. After this property is in service producing accretive cash flow, they issue stock to pay down the line so it has capacity for the next property, typically when a closing is near term.
GOOD brags in its press releases that it has never reduced, delayed or skipped a dividend. If this language is ever substantially modified or deleted, get the hell out. Otherwise, collect 12.5 cents per share per month, mostly tax deferred, for as far as I can see. This dividend won't increase in the next 5 years, imo, but starting at over 8% tax deferred is a good enough for me hedge against inflation.