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American Capital Agency Corp. Message Board

  • rosilvernail rosilvernail Mar 3, 2011 2:39 PM Flag

    OT -

    As AGNC slowly drifts lower on a 200+ day, what are your thoughts on the brutal beating CQP is taking on earning?

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    • IT was an alledge monetary default for improper recordation of revenues by a wholly owned subsidiry. A trader's wet dream, but non-monetary defaults for financial statements not prepred in accordance with GAAP very difficult to prove, requiring expert testimony and months of non-sense. The suit will be dropped, because the note holders will be held responsible for shareholder losses, if it is negligent suite. Total non-sense. This would be in effect an accounting scandel, but I am not buying it. I will be looking to buy more tomorrow. There will be a pop when the note holder retract the default notice.

    • That's what it is all about, pretty much. When they created the subsidiary to make liquid NG, it showed up in the earnings as a big negative - but was actually a wash as the sub gained like value. That was mostly the drop last week (earnings were stellar which didn't help but the confirmed the year long divi). What I can of today is a hedge fund (which holds senior debt, I think) claims the creation of the sub changes or cause an "event" which puts CQP in default if they don't pay up right away. CQP has counter sued and, of course with those kinds of head lines, mass exodus and stops taken out straight down. I have no idea as to the merits on either side but hope the bottom/support happens rather soon.

    • NVM, just saw bobinesco started a different topic for that.

    • What about the CQP lawsuit? Is that relevant to today's price action?

    • Hey Richard,

      Quite a precipitous drop. Your "surprise" purchases may pan out. It just depends on where CQP finds a bottom from its two "negative" events. GL.


    • Lol, maybe you should pay me not to buy options - I had an order in for .50 on the Apr. 19's and when it filled "unexpectedly" I was very surprised, then a few seconds later my "just in case" bid from last week filled at .30! Goodness - let's hope for some small rise in the next few weeks.

    • Ben. Best laid plans. CQP started a very precipitous drop right after I bought it. So much for my "bottom" theory.


    • Hey Ben,

      I've been watching CQP closely this last week, and although my preferred timing on entering a CQP trade would normally coincide with the historical run-up commencing at the end of March, I decided to enter today for a couple of reasons. First, CQP took a major hit last week as a result of its earnings report. It wasn't terrible, but did cause some confusion and concern over outstanding debt. I actually chased some calls last week (fortunately they ran away from me) as a result of what I considered to be a "depressed" price given the chart history. On top of the depressed price, today CQP has added a significant debt offering, further depressing the share price. After watching CQP reach a "bottom" at 18.82 (you have to go all the way back to Nov. 8 to get lower than 18.82), and then rapidly climb back to over 19.00, my thinking is that CQP is up from here. Will it regain its momentum and retest its 52 week high of 24.54 prior to its distribution? Highly unlikely. However, despite its average dividend (.425), this stock has an uncanny ability to climb during its distribution cycle. Last year, had you purchased CQP on this date, you would have seen it move from 15.00 on 3/8 (3/8=today) to 18.58 on 4/28 (4/28=the day prior to distribution)), for a gain of 3.58. An inter-day high of 19.50 was reached on April 23, for a potental gain of 4.50. I decided on the June 19's at 1.50. This puts my par at 20.50. Less leverage than the 20's, but a little "firmer" ground. Given the history, 20.50 looks safe to me, with some promising upside. As regards the other names in the MLP sector, I am judiciously reviewing each name and deciding on my plan of attack. I will probably wait until the end of March (historic ramp up) before I make any additional moves.


    • Good move. There is plenty of time to get into the MLP's for the April run. I can't think of any longer money to set-up. ETP may do a secondary, so I am staying away from it. Don't know ENP. If you have some another place to play, great. For me, I like the CQP set-up from here. $22 is an easy target, so to run from $18.80 or so to $22.00 is a nice trade. It will be there tomorrow I suspect.

    • Sold my ETP, ENP and CQP yesterday morning when they were way up. I still have a couple energy stocks, but I have moved elsewhere for now.

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19.58-0.06(-0.31%)Jul 25 4:00 PMEDT