CVRR price was dropped by the recent distribution, now being dropped by the secondary, and trading ~30c below the $30.75 SPO price (with SPO not over yet). Only a short history on the stock of course, but since getting to $30 in Feb I don't think it's dropped below $30 for more than a week.
Thoughts on buying shares here near $30.50? How do you see this one going in the coming months, from a stock and/or sector point of view?
If it wasn't for the dist + SPO combo, I would likely not be flirting with the idea at all, I would be more likely to place a bet when the next distribution starts to approach. Frankly the the sector seems out of favor while the overall market keeps clawing higher... And maybe that's my answer, but SPO's always catch my interest.
I think the crack spreads have declined which seems to be affecting NTI, CVRR and ALDW. They were over $28 and dropped into the low $20's. I haven't checked them in the last few days. Still large but it's the direction. Also some news stories about declining gas prices which the market sometimes misinterprets as declining margins.
They botched this offering, too. CVRR was trading at 33.20ish and higher on their ex date and high 34's before the ex. They has the S-1 in place before the dividend and then filed an amended one after and this seemed to crater the stock. So, now you have around a 10% drop from that mid-33 level.
If you read the FWP they filed today, you'll see that an underwriter had to step in and buy shares yesterday to stop the free fall.
The offering is for 12mm + 1.8 mm is not for new shares but for existing shares so this is not going to cause a dilution. They have 147.6 mm outstanding shares.
I'm just watching the overall volume today and watching how it trades. We have time before the next dividend and a lot can happen between now and then so I'm not in a hurry to jump in right now but the price looks tempting.
It is strange to me that so many corporate boards can't seem to get the timing right on secondaries. If CV had done it right, they'd be harvesting an extra twenty million.
I watched Elan sell 6million shares in the rising star ALKS this winter. Tried to do it in one day for cheap. If they had metered them out over three months they'd have brought in an extra 15-30 million.
Paying some decent trader with timing sense a going-rate salary to figure these things out for them would deliver a hundredfold on their investment in the person.
Now that CV has created a moderate dip for us, I think it will go down farther. Big up days for the Dow lately, friday will be profit taking and the whole market will follow down on that day. CVRR will go down more. The behavior is different every time, I still give it four days before it rises with confidence. If it tests 29 on friday, probably a limited batch is in order. It looks like 35 is not in the cards for a while. I thought the 1.58 dividend would propel it to 36+.
Thanks for your thoughts. My compass is likely a little out of whack right now as I've had so many opportunities get away from me in the past 1-2 months, and I have a lot of cash on the sidelines (maybe too much given the very possible scenario that the market could keep running for a while).
At what price do you think CVRR starts to become a buy for you in the near-term, even if the next dist is far away? Or would a purchase in the near term simply not meet your investment style/objectives right now?