For those who think the Bakken is shakin 'NTI' (I like that analogy)
Get it the water injection shakes etc.
I am currently attending (well actually enjoying some Single Malt Scotch currently) the
EnerCom’s Oil and Services Conference in SanFran. One of the reasons I wanted to attend; I wanted to look in the eyes of corporate executives involved in what some claim is the modern gold rush unfolding.
Those who have bought NTI__now wanting a (shaken ‘Bakken’infrastructure) investment in fracking may want to look into Green Hunter Energy [GRH].
THIS IS NOT FOR THE FAINT OF HEART: A copy of GRHs presentation can be downloaded from the GRH website or the conference website. Also a presentation from Wunderlich Securities__which recently initiated guidance on GRH can be obtained from the conference site.
GRH has a perpetual preferred [C] that is 25 par value and 10% annualized that is a monthly payout. While a 25 par it was underwritten at 21 and closed today 19.62 (record date 22??). It is a cumulative preferred and if ‘arreared’ the holders payout goes to 12%. Now those numbers are of course figured off the 25 par at 10%.
Here is the speculative play: The common closed up today at 1.94. So for every 100 shs of PR ‘C’ and 1000shs of GRH common__you get paid (if paid) 6.4% to speculate that GRH can make their business plan work. If this starts to fail you can sit on the preferred and maybe recoup some.
Like I said speculative__but I like this type of spec combo. If interested get into the preferred and use the general natural resource sector overbought reversion to the mean to pick at the common!
I did this with ALU (the old Lucent Technologies bought out by Alcatel). I bought a preferred trust (TRUP) that owns Lucent debentures [LUTHP] at 554.59 that is a purchase yield of 12.9% (today at 919.91). Then I waited and bought ALU in the low $1 range. I trade the ALU back and forth (selling ½ position) on runups. Then wait for fear Eurozone related to give a re-entry price. The LUTHP pays me to wait. Now ALU has some real assets but GRH has ‘some’.
NOTE: GRH has failed in the past to make preferred and debenture payments. GRH is a company that new management has repositioned from gov’t subsidized wind tech to shale water technology.
And yes I am frontrunning this! I am using some of my NTI profits for this spec!
The mother ship,s PPS of $1.88 does inspire confidence. I would take a flyer on the common before the Preferred if i was a betting man. I traded YRCW between $50 and $00.03 and 2 restructures in my younger days but dont have the heard for that anymore.
GreenHunter Energy, 10% Series C Cumulative Preferred Stock, liquidation preference $25 per share, redeemable at the issuer's option on or after 6/30/2015 at $25 per share plus accrued and unpaid dividends, and with no stated maturity. Cumulative distributions of 10.0% per annum ($2.50 per annum or $0.625 per quarter) will be paid monthly on the last day of each month to holders of record on the record date the will be on or about the fifteenth day of the month in which the payment is due (NOTE: the ex-dividend date is at least 2 business days prior to the record date). In the event that the shares are no longer listed on the NYSE, the AMEX or the Nasdaq exchanges, the dividend rate will be increased to 12.0% per annum after 180 days. Upon the occurrence of a change of control the company will have the option within 120 days to redeem the preferred shares at $25 per share plus accrued and unpaid dividends. If the company has exercised their redemption right, the holders will NOT have the following conversion right. Upon the occurrence of a change of control, and the company has NOT provided notice that they intend to redeem the preferred shares, the holder will have the right to convert the preferred shares into common shares under certain circumstances (see the prospectus for details). Dividends paid by the preferred prior to 1/1/2013 are eligible for the 15% tax rate on dividends under normal holding restrictions and are also eligible for the dividends received deduction for corporate holders (see page 92 of the prospectus for further information). In regard to the payment of dividends and upon liquidation, the preferred shares rank junior to the company's senior debt, equally with other preferreds of the company, and senior to the common shares of the company. See the IPO prospectus for further information on the preferred stock by clicking on the ‘Link to IPO Prospectus’ provided below.