For a hold for rising dividends for as long as Hamo keeps this growth roll going, it makes no difference whether you pay 9.50 or 9.70. IMO, load the boat before the close Wednesday. There has been no release of acquisition news since the 2Q CC.....so no "hints" about 3Q. BUT, from 2Q press release it can be deduced that Hamo had the new offering money committed before the offering announcement. Thus, little or no time lag between issuance and putting proceeds to work. Thus, accretion, not dilution from new issuance.
Lazy, slow market will be surprised with 3Q results on the upside. Makes no difference whether you pay 9.50 to 9.70. IMO, at least 94 cents div for 2014 (vs 78 this year) and price over 12 a year from now. Yeah, yeah, 9.40 or under means 10% yield or higher, but long term this is not important as long as the growth continues.
This week may be last chance for under 10.00.
Wow, that was 81.2% of the 1.36 million volume reported on those 3 exchanges. That's a massive effort by the shorts to keep a lid on the price. Too bad for them the tide is coming in. Despite a flood of short sales the price ticked up 4 cents.
Saw an article yesterday about FTR being the most shorted stock in the S&P 500 using days to cover as the measure. FTR was over 22 days to cover. NRF is over 18 days to cover at the 10/15 read, so it would rank near the top if it were in the index.
Shorts desperately need a big internal negative event. IMO, they ain't gunna get it next week. To the contrary, the dividend will be increased and the 2013 cad per share midpoint will increase. I love watching shorts getting stopped out. It's like a smackdown in reverse.
Those who did buy at 9.40 or under (there were plenty of chances with a 9.39 ask) had an OK week on the buy.
I expect next week will be even better, especially Thursday and Friday. Cover while you can, shorts. I have the feeling next week will be very painful. Better stock up on Preparation H.
I don't disagree with much of what you say. There are two limits on the rate of growth in cad per share. The first is the pipeline of available deals at a price which, with limited leverage, will yield a return on equity which is accretive to common. Hamo simply will not do a deal which is not accretive to common, imo. So far, it appears there are plenty of deals available, but it is a competitive market. The people on the other side are experienced players with full knowledge of alternatives to nrf. The capital markets limit what Hamo can charge for a deal whether that "charge" is a lower purchase price or a higher sale (lending) price. Thus the cost of capital affects the price needed on deals and still be accretive.
The second limit to rate of growth is available liquid equity (which includes cheap debt, subject to leverage ratio limitations). So, when the deals are there but the liquid equity is not, Hamo goes to the capital markets for cash to grow. As long as the new deals are accretive, the more the better in the long run, even though common offerings mean a temporary hit to the price.
With the above as the parameters, I don't think we are going to get a surprise dividend increase as long as Hamo has accretive deals to invest the undistributed cad in AND the markets tolerates a penny per quarter.
Hamo can get the price up by increasing the dividend, but that doesn't reduce the cost of capital if the yield stays the same. Hamo needs to get the common yield down.
Of course there is same-day and next-day covering. The daily short sale numbers frequently posted here are gross short sales. "Buys to cover" are not reported. When 200 to 500K are sold short daily and the NET change in 2 weeks is only 47,000, it means almost all of the 9/30 to 10/15 short sales were covered within the same period.
I agree, the smackdowns, even if only 3 cents, are meant to break the momo of a run-up. It works. A bigger smackdown can "shake the tree" which is causing longs to get scared and join the selling. That sometimes works very well, especially near 52-week highs when the "protect the profit" mentality causes hair triggers on the sell button. It's called market manipulation in case this surprises anyone.
Here's a Reuters headline:
Southern Copper Q3 net up 58 pct on smelting, refining output
DUH!! Try adding back the over 300 million legal fee to 2012 profit for an operational comparison.
Trust nothing which is second hand info. Always read the source document yourself.
It was a little early yesterday and right on time today....the 10 o'clock smackdown, something I've noticed frequently over the past few weeks.
Shorts sit back while the opening "feeling out" plays out with small volumes bid and asked, sometimes with spreads wider than one cent. When the opening half hour has the price up a few cents, still with small volumes on the bid, SMACK, a small volume (but big enough) dump driving the price down 3 to 5 cents in a hurry. Then the price gradually recovers.
Subsequent dumps are on a "price needed" basis, but happen 2 to 4 more times a day. This is why we see such high short sale numbers each day. They have not given up, but appear to be unwilling or unable to go significantly deeper.
Short interest at 10/15 settlement date = 35.257 million, up 47,000 from 35.210 million at 9/30.
Even though total a tad higher, suggesting conviction to wait, no big increase, suggesting will to go deeper is waning if not gone. No sign whatsoever of capitulation. Great! The more concentrated the squeeze, the bigger the impact.
Welcome aboard! Hang around for a while to pay us 21 cents on top of your short cost. I hope Hamo has a killer 3Q report for you. Don't know what straw will break the shorts' back, but know it's coming. Just don't know when.
Last hour was a nothing just like the preceding 5.5 hrs. Last few minutes was the usual day traders closing out with nothing to show for the effort. Volume not this low since last July when 40 million fewer shares were outstanding. A nothing day which brings us one day closer to earnings.
Peanut gallery pushing back and forth at each other so far with the 10 am short smackdown coming a little early this morning. All of 384K vol as of noon with slight upward bias making me sleepy.
Only 4 1/2 trading days left to dividend announcement. We'll see if the big boys step up to the plate after lunch ends at 2:00. Last 15 minutes may be telling. Glad to see the big seller gone. Climb to dividend can continue.
Of 1.194 million shares traded on 3 exchanges, 745K were short......62.4% of the volume reported.
Total volume over 2.2 million so only about half the volume reported short sales to finra.
Nevertheless, the same 3 exchanges report every day. Today, the pct short spiked. Nice. It didn't work.
Was falling asleep watching paint dry between 9.52 and 9.54. Then, at 11.33 am a block of 334,000 went off at the ask of 9.54. I looked for a big sell up for a half hour before the big buy but there was none. Sooo, it appears this buy came out of a MM's inventory. In any event, the big buy appears to have significantly reduced the supply on the sell side.....or at least reduced the magnitude of the hurry to sell which has pressured the bid for the last few days.
In other words, without a big seller wanting out in a hurry at the plate, the rise to dividend and earnings may now begin. It will be easier to recover from short slapdowns without a tute huffing and puffing on the bid.
The more significant number is tons on live warrants. Cancelled warrants may be physically removed as soon as the slow warehouses can bring it to the loading docks.
The LME website shows, total, cancelled and live tons.
NASDAQ website short interest section shows the last 25 short interest reports. 10/15/12 was 10.3 million and 9/30/13 was 35.2 million. With a couple of minor decreases mixed in, it has been a steady increase over the year.
Yup, some newly added shares have had a few opportunities to cover at a decent percentage profit, but for the most part, covering during downturns has not stood out to any significant extent. This means to me a whole bunch, maybe 75%, of the 35 million are WAY underwater on top of the dividend carry cost. Methinks the water is about to get deeper with div and earnings announcements.
I think the 10/15 short report is due Thursday. Since it is privately produced, I will be on time.
I think it is more than shorts the past few days. Might be a tute dumping before 10/31 with no similar size on the buy side. The pressure on the bid has been pretty much constant since last Thursday's close. NRF performing poorly today relative to other reits. Just gotta wait it out.
Dividend increase should be widely anticipated by now. If not, then market is more stupid than even I give it credit for. On a pure yield basis, if 80 / 9.50 =8.42%, then 84 should equal 9.976 for the same yield.
Likewise, if nrf sells at 9.50 on estimated cad of 1.06 (8.962 times with 5 months to go ), then the same ratio on 1.10 cad should price at 9.858 + 2.25% (for less discount factor at .75% per month) = 10.07. The discount factor is for time and risk on the length of the forward look. All rational thinkers should agree a full year's estimate is likely to be more accurate with two months to go vs 5 months to go.
This looks to me like a "show me" market on nrf.....don't pay for anticipated future results until they are historical fact. That takes reasoned inference (aka faith). Those who bought nrf at 17 when the dividend was 36 cents are likely to still have a bad taste in the mouth. Faith and bad taste don't coexist in the same person.
Those who do believe the reasonable forward inference just have to wait for them to become fact. If they are right, they will make a helluva lot more money than the show me crowd. I'm content to wait.
Means 2014 dividend of 10% or better if penny per quarter continues thru 2014, of which I am confident.
Gunna be a growth earnings report....I estimate 2013 midpoint cad at 1.10 to 1.12, which is up from 1.06 August est midpoint. Of course, this div will b 21 cents.
NRF blowing in market wind for last few weeks on no company news. Take advantage of weakness for flipping or core hold.
Just got another 1,683 'cause that's all the cash I had in an IRA.
Money with mouth. When I saw vol on 9.49 bid jump from 11,000 to 47,000 against 25,000 on 9.50 ask, I hit send on 9.50 limit to buy 5,000. Got three executions to fill, all at a hair under 9.50.
I'll probably hold these at least thru ex div because 21 cents / 9.50 = 2.21% in about 3 weeks while I pay Fidelity about 1.77% for 52 weeks.
IMO, we're over 10.00 on 11/1 absent some macro disaster. If not, the increasing yield is enough for me to wait it out.