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Hugoton Royalty Trust Message Board

  • neilfe99 neilfe99 Jan 31, 2013 3:04 PM Flag

    HGT - After May - The Stock should be BELOW 7

    Assuming nat gas under $3 and if HGT loses the legal proceedings in full, there will be no dividends for 5 years plus, the stock would quickly be back to $5. The yield on this trust has usually averaged under 5% given the volatile nature of the commodity, so in a best case scenario with the legal case and assuming they can double the dividend to 12 cents a quarter, the upside is $12.

    Given where the stock is trading right now - the market is putting an almost 50% probability that HGT wins the legal case. I think the odds are much closer to 20-25% - which brings us to $6.75

    Knowing nothing else, i would not want to own this until it hits 7

    Sentiment: Hold

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