Here's a little secret ... if you Google "Yahoo spin off" you'll be surprised at how much you will learn.
A corporation creates a spinoff by distributing 100% of its ownership interest in that business unit as a stock dividend to existing shareholders. It can also offer its existing shareholders a discount to exchange their shares in the parent for shares of the spinoff. For example, an investor could exchange $100 of the parent’s stock for $110 of the spinoff’s stock.
And even in the Seeking Alpha article the author said:
"Please note that because we're focusing on the tank car issue in particular, we'll leave out the many other positive tailwinds that we've covered elsewhere, such as the wheel repair business, growth in Brazil etc."
Yes, the Stifel analyst's call and the market reaction simply demonstrate that a lot of people who trade the stock know next to nothing about it. Hopefully more people will take the time to learn the facts and we get more shareholders who have a clue and are less likely to panic ... or someone who spots the absurdly priced stock and decides to take a stake in a large chunk of the company. Wouldn't be surprised if Stifel (once again) changes it's recommendation or, better yet, changes the analyst who covers the stock.
I think the common wisdom (he said sarcastically) is to give these "events" three days to get sorted out ... or at least begin to get sorted out.
Well apparently a boatload of shareholders were clueless about the company or its market. For him to bring up lower oil prices and possible fewer new orders a couple of years out as if the current situation is any different from what it was a month ago is a brainless thing to do. Did they even postulate a new price target? Even he must be a little surprised at the magnitude of the selloff. Wait for it, next week he upgrade it to a strong buy.
If any Stifel clients followed the advice to "hold" they must be super pi$$ed as the analyst.
The price action is totally ridiculous, but obviously some weak hands ( to say the least) ran for the exits.
As I said in an earlier post, if you look at call options through to next January they haven't fallen that much. I was looking for some "cheap" calls to buy in Sept, Dec or January, but there weren't any real bargains awhile ago.
Either the analyst was setting up something or others saw his call as an opportunity to manipulate the hell out of this stock price.
Greenbrier Cos. fell the most in almost seven months after Stifel Financial Corp. analysts estimated that railcar demand will be hurt by a decline in oil prices.
Stifel estimated production will be 84,000 railcars this year, less than transportation consultant FTR Associates’s outlook of 86,000.
"They are probably trying to be RIGHT somehow. Make enough upgrades and downgrades, eventually you might be right. "
I believe that's known as the Jim Cramer system. He makes multiple calls on every stock and selectively remembers which calls to draw attention to and which to ignore.
And looking at the call options for January, it looks like options buyers are expecting prices to be in the $60 to $65 range. Even shorter term call options remain fairly strong.
This stock gets whipsawed about quite regularly even on an intraday basis. Day traders and algorithmic drive trades seem to regard this stock as a profitable toy. I find it hard to believe many longer term retail investors or institutions would be that easily panicked into selling. A few hundred thousand shares changing hands (probably the same hands over and over) are just running the price all over the map.
"they'll find that a "Magic 8 Ball" may be the answer."
Don't knock the proprietary analytical tool used by Jim Cramer.
He thinks that him selling 200 shares (on Yahoo divide by 100 for accuracy) is somehow meaningful and he actually believes everyone will be impressed by his fairytale number of shares.
So awhile ago I sold the Sept $45 calls for $1.10 and the Sept $44 for $1.30. Bought them back at a profit on the Tuesday dip, but still held the stock as the price recovered. When the stock rises some more, I'll probably do the same thing again. It's just another "dividend" added to the already generous distribution from BX.
Gee thanks for the trade school lesson. I was suggesting an alternate strategy to just cashing out of the stock for anyone who thought a correction was looming, not instructing an individual on what he should do after he sold his stock.
So sell covered calls and when the correction hits, buy them back at a profit while still collecting the dividend. The profit on the call trade just adds to the yield you get on the investment ... unless you're wrong of course.
" fairly young without a lot of experience"
Not sure if age is the determining factor, but lack of experience or lack of learning from experience certainly is. Many Yahoo investors thrive on emotions rather than boring fundamentals. They want to hear things that reconfirm their "thinking" and feel traumatize if anything seems to contradict their dreams.
I hold some of both KKR and Blackstone. I think BX has a better PR department. You see people from BX on CNBC and get a boatload of news releases from them. KKR not so much. Although they both seem to be good investments and both lack some transparency as well as unpredictable dividends, BX is probably more often in the public eye.Maybe once we get past a tiny rate hike or two, KKR will be "discovered."
" as if the "thumbers" actually know something."
You do realize this is a Yahoo message board. People only like what they want to hear and dislike anything that hints at a reality that doesn't fit into their fantasies.
May also have been because of the pipe line spill in Santa Barbara, Maybe people think everyone will want to buy more super safe rail tankers.