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American Capital Agency Corp. Message Board

  • headhunter80904 headhunter80904 Jan 5, 2013 5:08 AM Flag

    OT: Oil Trusts -- SDR, WHZ, /CHKR, etc

    Just wondering if anybody on the board is playing the oil trusts like SDR, WHZ, CHKR, etc. They're sporting pretty high divvies, and at least these 3 have a good amount of life left in them. (I didn't include SDT or WHX, as those are on their last legs.) Thoughts anyone?

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    • For a 9% divi try RNF

    • Took some implied advice from Ovicp, and accepted modest profit. I did not want to die in the same oil bath that cooked my holiday bird last fall when the mlp's failed to run.
      Ok, not entirely. I am holding ten contracts of june 12.5calls yet.

      To get my money out I had to exercise as there were no buyers within a dime of intrinsic.

    • don't know where you got your "last legs" for SDT. only 2 years old and 18 more to go. i have both SDT and CHKR. both are mostly doing minimum distributions, and the subordinated units held by the issuers are getting killed relative to unsubordinated publicly held units.

      both have been beaten down recently and are targets for accumulation.

      unless you enjoy massive paperwork that is clear as concrete(K-1 trust documentation), keep any or all in a tax exempt account like an IRA.

      these things will get a kick in the pants when oil and gas go back up.

    • I too, have been accumulating WHZ . I played the last "div run" with options and got slaughtered. When it dipped below 15 I loaded up matching my shares with june 12.5calls at 2.30-2.75. Just about then my son came into some money so I had him margin up and match shares with the same calls. So far he is pleased. We will be selling on the way up starting just before the declaration, probably two weeks from now. It seems in this market the div run ends just before declaration ala agnc.
      We will be holding some of the shares for the distribution. Half the profit will be left in retained shares. This way each cycle yields some long term periodic income.

      For "diversification" we did the same with WMC.

      We signed a pact that we would only trade in equities begginning in W.
      Oh carp, I was reading it upside down, it was supposed to be M.

    • I bought a bunch of WHZ at under 15, waiting for 17+ to sell. SDR has legal problems as does PER.

      • 1 Reply to ovicp
      • It will probably hit 17 next week. the last div reduction was .13 approx 14.6% and the stock tanks four points.That seemed excessive. Did you have any ideas on it? There are 34 or so distributions left. The stock price at the time was 19. So each capital return per quarter should be 19/34 = .56
        Ok that is pretty high. I see why the units dropped so far. That only left .20 as the dividend portion of the distribution. The value of this trust is very much tied to the price of oil.

        What basis do you use to ascertain what the unit price should be?

19.70-0.11(-0.56%)Sep 23 4:00 PMEDT