MMP is acting sort of strange. Was up to $90 last Friday and then ended up a couple of points down, and is down again today. They usually don't do many SPO's, so I doubt it is word leaking out about an spo. With so many mergers in the MLP space, I worry if this is a leak that they are going to be an acquiror. It could just be profit taking as MMP has had a nice run this year.
Wirtz, when a company does a public offering, in most cases, they agree with the underwriters to sell to the underwriters the number of shares in the offering. The underwriters purchase those shares on the night that they sign the underwriting agreement also known as the pricing date.. The underwriting agreement provides that the underwriters pay the company for the shares on the 'closing date" which in this case is Nov 26 (this is the day when the money is exchanged for the shares, like a settlement date). In reality, the underwriters don't hold the shares very long as they usually have already agreed to sell them to their mutual fund and retail brokerage clients
MMP is a keeper. Strange action today as it was up around $90 and then sold off. Wish I had bought it years ago, but I used to follow the "Stagg" approach and chased too many high yield stocks before I found out that low yields and high growth wins the race.
Kee, you highlight the weakness of the dropdown/MLP (SDLP is not an MLP) model in that the equity markets have to cooperate to make the business work. If they can't issue reasonably priced equity to acquire new properties/assets, then they can't grow. Some of the e&p MLPs resorted to issuing preferred equity with cheaper yields than their common equity, but there could be issues with that strategy depending on whether the preferred is counted as debt for purposes of their debt ratio covenants. I liked SDLP and was sorry to have to let it go to book the tax loss, but it is a lesson that when there are issues with a sector, oftentimes it is best to step aside and wait for a better entry point. SDRL is the posterchild for folllowing that strategy. Too bad I trusted the RSI indicator into believing the worst was over for NADL. Another expensive lesson learned.
Sarge, I don't know if SDLP has bottomed yet. That might not be known for several more weeks, especially since SDRL reports next week along with NADL. Even though SDLP's dividend is not at risk compared to NADL and SDRL's, it has followed those down and the reason must be simple association with the Seadrill name. Therefore, if SDRL and NADL maintain their divies and get a bounce, SDLP may also bounce, but I doubt that means the "all clear" bell is sounding.
Again, just as we saw with AWLCF, a stock may bounce on a dividend announcement and then give back all of that bounce (even if Stagg doesn't post the post-divy results after earlier trumpeting the great divy run-up).
Ed, you are correct that we usually have a bear market every 7 years or so, so next year may be the last year of this bull. There could be a blow-off top, but I am not sure every bull ends with a blow-off. However, you can bet that if everyone on these boards starts getting super positive and rejoicing in their stock market gains, that is a sure sign that a reversal is imminent. You could be right about European stocks, especially the big cap, high dividend paying ones -- there are plenty of ETFs for those. If you think the yen is going to continue to slide, there's an inverse ETF for that. mREITs will get hit on the initial rate rise, but I don't think the Fed can raise rates that much, so once they are done, the mREITs should be beaten down and in a good position. You are correct that we need to start thinking of some new ideas besides the usual high-yield stocks.
But you are forgetting that rising short rates effect their borrowing costs which effects their spread. Offset against that is their hedges, but most hedges are tied to the 10 yr, so it does depend on the yield curve slope, or stated differently, how fast each end of curve rises. The other point about rising rates is that they effect book value (usually negative). So while rising rates may give mREITs an opportunity to add investments with higher interest, the assets on the books could take a hit
jbc, is it even worth selling covered calls? I wouldn't think the premiums were worth it given that the stock has been beaten down. Plus, if there is a rebound, you could easily get called out and miss out on any additional upside. Perhaps selling OTM puts is a better play?
Sarge, I have not yet bought the Feb options on Yahoo. Waiting to sell my Nov options first. Aapl is way overbought here with the RSI over 80, so it is due to go sideways at some point. No doubt they will have a good holiday season to report because of the iphone 6, but the jury is still out on the other products.
As for Stagg's contention that aapl has a "low" yield, better to have a low and growing dividend, then one that is in risk of being cut (like NADL and SDRL). As for building a better mouse trap, that is a risk in the electronics and many other ndustries, but usually there is ample time before one company's product is supplanted by another. Blackberry was the king for a long time and its stock was a multi bagger, up until the time the iphone was first introduced. Before that, I remember Motorola having a stronghold in cellphones and its stock being a mutlibagger. So yes, you can't put a stock away and forget about it just because it is the leader in a certain sector, but that also shouldn't keep one from investing in these types of stocks.
The funny thing is that the same can be said for Ford, yet Stagg is a big proponent of that stock, even though GM or Dodge or any other truck company could come out with a better truck to challenge Ford. Sometimes we can have inconsistent rationales that justify our positions.
The EPB merger with KMI was approved and I sold all of my EPB shares. Moved some of the proceeds into WMB which has been on my list for several months. WMB just announced further guidance on their dividend increases extending now through 2017, promising 20% growth each year (check the announcement for exact percentages and time). IMO, with that type of dividend growth WMB should be priced closer to a 3% yield rather than its current 4% yield. I think it can easily get to $70.
I decided not to want to own KMI shares, mainly because the issuance of shares and debt to close these mergers might weigh on the stock. At any rate, WMB has projected better dividend growth of 20% whereas KMI projected 10% growth.
I also own shares of WPZ and was thinking of swapping those for WMB shares next year.
True, but they used that $193mm to pay down their credit line (which they can re-borrow when the next acquisition closes). As I recall, many of their competitors issued preferred equity when it made more sense than to issue common, so that's another avenue they could use.
From the iv board, Wells downgraded several of the marine companies, including SDLP. Maybe they are a little late as the market tends to be ahead of the fundamentals.
On a separate note, the Fed minutes are due this afternoon and maybe they might cause the market to rally and give another chance to sell some tax losers at a bit better price.
Any increase in EVEP stock depends on a monetization of their Utica acreage and a return to doing what the MLP was initially formed for -- buying long-lived producing properties. There should be an acquisition soon as they have the proceeds from the sale of Eagle Ford properties that have to be redeployed in order to obtain like-kind exchange tax treatment. I think they said on the earnings call that properties have to be identified by the end of November. Hopefully they don't issue common equity to pay for part of the acquisition price.
"Dollar cost averaging will not always made us money but it will 'help us lose less".
This is totally non-sensical. It is true, if and only if, the stock comes back and increases over your average price. There are plenty of stocks that never came back.
Unfortunately, I am still in NADL. I just saw the 20% drop a minute ago. I thought this was going to go the slow bleed route a la SDRL and SDLP which is why I said it was premature to average down, especially with nothing new reported. Although in retrospect, it does show that dollar cost averaging is a sure way to lose money if you don't know where the bottom is. I am reminded of that big investor, Joe Lewis who kept buying Bear Stearns from $100 all the way down to $10. Never heard what happened to him.
If this does go to $2, it doesn't mean that stepping in to buy is going to be any easier of a decision at that point since if it drops to $2, it will probably be due to some announcement. I still have not sold SDLP yet even though it is on my tax-loss list and seems to be in better shape than both SDRL and NADL in that they just raised their divy. As I said earlier, SDLP may just be getting hit because of its association with SDRL, which you think the market may recognize eventually.
Still in Aapl and since that is in my wife's account, she probably won't sell it.
the street dot #$%$ has NRZ as a sell because (and I quote), "it reported significant earnings per share improvement in the most recent quarter," "net income growth has significantly exceeded that of the S&P," 'the gross profit margin is very high." The algos that trade the headlines might knock it down a bit and create a nice buying opportunity heading into the next divy announcement.
Noticed that the street has one of their stupid headlines listing NRZ as a stock to sell (they did this with WMC before). Anyone who has ever bothered to read any of these reports knows that the writers usually don't know what they are talking about (the piece on WMC showed positive fundamentals, yet the stock was still a sell in their opinion). This might produce a decline in NRZ and a buying opportunity. NRZ has had a pattern of declaring a special dividend every other quarter, so they might have one for Q4, which should be announced in early Dec. They also had some post-Q3 gains that will be reflected in Q4 earnings (the news is already out on those gains, but the algos that trade will pick up the positive news when the Q4 earnings are announced in early 2015. Also, Leon Cooperman has bought a large block of shares.
Gambler, I think it is just profit taking or typical option expiration week activity. There is some speculation that Yahoo may announce their plan soon, but I think they will wait until they report in Jan which should be AFTER the January options expiration. That means one has to buy Feb options if one wants to be sure to catch the spin-off announcement. I think mgmt is also waiting because as long as the plan is still to be announced, the raiders won't be able to criticize it and mount a proxy battle. There have been lots of articles on how much Yahoo could be worth with some figures over $70.
Despite what seems like a sure thing, I am not going to be betting the farm on this, as whenever I think I have found a "bet the farm" stock, something always goes wrong. I am going to stick with using options. As for BABA, the stock (not the business) reminds me of GOOG when it first came public.
Grgsvll, many posts were doing the same thing on other message boards. The S.A. article points out that their oil production is declining. The hedges will help out this quarter, but this is a lost cause. It is due to catch up with the other trusts (SDT SDR and PER) in the rate of decline. Because CHKR didn't really run up into the distribution announcement, I didn't play the puts this quarter. These trusts are difficult to short because the shares are hard to borrow. Since we are getting into tax-loss selling time, there should be added selling in these shares. As I stated before, this should go to $7 or below. Come March, they will no doubt show more deterioration in their PV-10 and CHK will probably mark-down their value of the subordinate shares that they hold to under $6. When CHK finally unloads those shares, a bomb is going to go off and holders are going to wonder what hit them.