Still not clear on implications of spinoff. Per NCT 2012 Annual Report, pg. 45 and 46,
risk information states that (among several "risk factors") the taxes on the spinoff to shareholders
may exceed the cash dividend, as well as additional expenses for management and administrative
fees that otherwise would have been handled more cost effectively prior to the spinoff. Not to mention that the revenue from the operation from the two operations (NCT and NRZ) may not be as fruitful as anticipated.
And yet, the stock has traded up recently, and with very high volume the last two trading days.
I wondered why the market wouldn't wait until AFTER the new division takes place and trading begins with NRZ, or, at least, until after ex-div, at which time the stock(s) could be purchased without the additional spinoff redistribution and resulting lowering of cost basis and additional taxes.
With spinoffs from other companies, I recall the spinoff was handled as a distribution of shares while the common share price remained the same (i.e. Ship Finance from Frontline, SFL and FRO), not the common share price splitting in half. Will there be a cash dividend with NCT as there has been in prior quarters? How does the yield on most recent divs come into play here with shares of NRZ being offered as a share distribution?
My understanding is that shares held with NCT as of the close of trading on Monday, 5/6/13 will result in one share of NRZ.
If the market is trading up the value of NCT, does it not value owning shares more valueable now than waiting until after ex-div to buy shares in both companies? If there were negative tax implications with owning NCT through the spinoff distribution, I would think traders would be selling NCT.
Contrast the option pricing in this case with LINN's options. By seeing proportionality between the stock price and option pricing for LINN, I have been able to make successful LINN put spreads.
I thought that the factors of time to expiration, volume , and volatility were the main drivers of option pricing. BBRY calls and puts for expiration dates (April and March 2013) were almost all down as of 9:40 even though the underlying stock price was UP over 3 percent. (I post this question here due to an inability to access the BBRY message board.) How can option pricing for C&P be both down with a higher stock price?
Baseline volume figure: Most Blackberry users will upgrade to the new Z10. Current Apple and Android users will stick with what they use.
Those users who depend on a very reliable system of security who are in the market to upgrade from their current Iphone or Android will seriously consider the Z10, with a minimum of a small percentage moving over to Blackberry. So, there's my minimum volume estimate. Once the new Blackberry phone's quality aspect gets more well-known, it should draw in folks who are undecided. This baseline minimum volume figure sets a support level for valuation.
This time of the year is known as being a slower time for Cathedral. You'd think the price for the stock
was already factored in. Days before the earnings announcement the price dropped below what one might consider a reasonable level. Then the earnings came out with the management announcement for a slow year to the surprise of many shareholders (except those who had already sold a day or two before).
I can't help but think that this news leaked out to some a day or two before.
It struck me as odd that there are no other posts on this board.
A poster in this thread remarked that he was surprised that WMC management stated that agencies offered better value than non-agencies. Interestingly, MTGE management said the same thing in its CC weeks ago!
I was concerned about the increase in leverage WMC was using (now over 9 percent). This subject was
raised by an analyst at the CC yesterday. The response by management was an education in learning that leverage needs to be viewed in the context of duration and convexity, tools of which can be used in the managing of risk in a bond portfolio.
I had never heard the topic of leverage discussed in this way in any CC by other MREIT management. It was pointed out the number of years WMC management had successfully managed this kind of portfolio. I didn't realize there was such depth. I think ARR and AMTG use similar high leverage and are not priced with the same valuation as MTGE due in part to the lower performance of their earnings results.. Given the earnings results of WMC, I don't know why WMC is not given a higher valuation.
Did anything happen during 2012 to the business of UHT that would explain why capital gains reported on my 1099 would be almost the same as the ordinary dividends reported for the same year?
I have no other stocks, including another health realty company, whose capital gains are anywhere near the ordinary dividends amount reported for the same stock. The problem here is that the taxes to be paid on the capital gains will reduce the effective yield on the divs received - almost like paying taxes twice.