The difference in the price the trust gets versus the commonly quoted NYMEX price is due to differentials, including transportation costs. I believe this was disclosed in the prospectus. Nat gas trades at different hubs throughout the country (as an example see the WSJ story the other day about the high cost of nat gas in the NY and New England hubs compared to the cheap cost in the hub nearest the Marcellus).
I'm with Bob. You don't have to play in every sector just because they may have a good yield. Plus, I think China eventually blows. Do we get sell in May?
What the heck do they know. Geez, for a guy complaining about Seeking Alpha, it takes some nerve to quote Zacks.
I think I posted the subordination threshold in a separate post (maybe around 69 cents). The subs probably still get 0 or a few pennies. I think all of the SA articles have kept the stock price in check, so I will be playing either SDT or SDR puts for the ex-date falloff unless CHKR's volumes decline big.
Both VNR and APL have issued preferreds but the distributions are treated as guaranteed payments for use of capital (in other words, interest). VNR issued a K-1 to report that interest.
They will do an spo to fund part of the purchase price so maybe that is what the after market is anticipating.
Keep wishing. The sub period ends soon. Next distribution will be even less because the subs convert to commons. It would be 32 cents per unit if they make the same amount next quarter. You know a Seeking Alpha article is coming after the earnings are reported and after the ex-date. This is going to new lows.
Sarge, since mid Feb SDRL has rallied up around to its 50 dma a few times and then sold off. The stock has gotten a lot of air-play when previously you never ever heard about it. I don't think it can really bottom when it's in the news almost every day.
We have been conditioned to try to buy almost every dip in any stock because that worked before. I'm starting to get the feeling that stocks that dip are not rebounding like they did before.
Vin, I think there was a piece in Barrons or the WSJ about funds leaving loan funds. When it looked like interest rates were going to go up, Wall Street was rolling out the new-new thing to make sure they kept your assets invested. Plenty of stories about the same old thing -- companies issuing PIK bonds, private equity firms issuing junk bonds to pay themselves dividends, slowing house sales etc. The economy may not be getting stronger. Back and forth we go.
Stagg, I realize this comes from TD Ameritrade, but let's analyze it.
There is no argument with the first point. For number 2, there have been many articles saying that high yield bonds are overpriced, whereas muni bonds are undervalued. How can high yield and munis both be buys?
I agree with #3, unless the economy slows down. Many commercial REITS have already recovered and are selling near highs. Number 4 is a puzzler. If rates are going up (I'll come back to that), then that will be bad for agency mREITs. But as we have seen recently, maybe interest rates aren't going up after all. The 10 year seems to have resistance at 2.8%.
Not all brokerage opinions are wrong, but they are often conflicted in that they want to keep retail investors investing no matter what the scenario is. They are like the ads for real estate brokers when they say it is never a bad time to buy house (except for when houses are overpriced, but that can never happen, right?)
This is true, but there are also many of us who are trying to have a serious debate about the risks of investing in these trusts. Too many retail investors see a 20%+ "yield" and are sucked in.
On a side note, SDT just reported a cut to their distribution (last one before their subordination period ends). They did, however, get over $4 for the gas that they sold last quarter, so that should help CHKR in the short term if they are able to get $4 for their gas.
Keebon, you should read their filings. Since I don't have a position in SDRL, I only skimmed the news release. I could be wrong, but it looks like SDRL had entered into some type of derivative transaction, in which they were forced to buy back those shares from counterparties. This would be much different from a voluntary buyback transaction entered into because they thought their stock was cheap. As with most things, the devil is in the details.
Gambler, the other day I opined that the market could still power ahead. It's funny that I am the bull now after voicing a bearish view for several years. Perhaps I am the contrary indicator.
Keebon, I share your sentiments about the safety record at WMB/WPZ. As for where to put any sales proceeds, EPD, PAA, SXL and MMP are the cream of the crop as far as long-term track records, proving again that the highest yielding vehicles don't always win the race. As for ATLS, I own a bunch, but I think the market is now in a "show me" state and the stock price may tread water for some time until the distribution starts to grow again by a significant percentage. I have mentioned WGP previously and there's a post on the i.v. board about it. I think WGP is going to be one of those that you look back at in 3 years after it has doubled and say why didn't I buy that, much like TRGP and EPD have been. They never appear cheap but they keep going up. I am also looking at EQM which gave some guidance on continued distribution increases. If we get the "sell in May and go away" or if Ukraine blows up, you might get a chance to add any of these at a good entry point. Be patient.
Priced at $6.00. Will be interesting to see how it trades when it opens. The recent spo's of NYMT and WMC were a little sloppy and those both traded down. Many investors have played the "buy the spo" game in the mREIT sector for several years now, generally with good results, but I think that is changing and it's taking more time for the stocks to recover. I sold a good portion of my position after the ex-date but didn't completely get out. I am going to be a little more patient before getting back in, since the next dividend is still 2 months away. Plus, the situation with Ukraine and Russia seems to be getting worse.
Keebon, I was going to post my usual warning that the announcement of a buyback does not mean that shares have been bought back but I thought I would check the SDRL announcement first. When I did, it appears that they bought back these shares to satisfy some type of Total Return Swap. I don't know the details of that, but suspect that this buyback may not be your typical run of the mill type.
As ed mentioned below, ATLS maintained their distribution at 46 cents for the 3rd quarter in a row. Both APL and ARP held their distributions at the same rate. Hedgeye was supposed to release their "report" today so we'll see how that plays out. ATLS had been a Wells Fargo top pick so we will see what they say. Probably dead money until some growth resumes, as money is chasing the general partners and MLPs who can increase their distributions be significant percentages.
Gambler, I don't think I see it that way. I took a quick look at the 1 yr charts of the S&P and the Russell. The S&P is above its 50 dma, is not overbought on an RSI basis and is in the upper half of its trend channel. I think the 1900 level could be important because if it doesn't go through that level and reach a new high, it could signal the the market is rolling over. Then again, once it reaches the top of this channel (at 1925), it could pull back with the sell in May and go away.
On the Russell, it's somewhat different as it broke below the 50 dma and is now fighting back to it. If it doesn't break through, that could be a topping sign. Just from looking at the pictures, it looks like the Russell broke through the bottom of its channel before bouncing, so another test of that level could eventually give way and we could easily see a 10% correction down to 1000.
The 10 year also appears to be behaving in the range between 2.6% and 2.8%.
I agree that there has been plenty of froth in the market, but the last few weeks may have wrung some of that out. Typically there is a blow-off phase where the market goes parabolic and everyone is convinced that stocks will never decline, before the market reverses and corrects.
One of these days we are going to get a correction and the longer we go without one, the larger it is likely to be. But I'm still betting it doesn't come until the Fed concludes QE later in the Fall.
Good luck if you play the inverse ETFs. That TZA is sitting right on its 50 dma.
Saw a dividend announcement on MAIN in which they increased their semi-annual dividend by some 38%. I am not familiar with this BDC but saw that they got knocked down when the other BDCs got hit and then they did an spo too. Looks like they bounced off of support and the MACD lines are turning up. This one doesn't yield as high as some of the other BDCs. There's also an article about 2 loans that they put on nonaccrual and will probably update when they report earnings. I can't remember, but someone posted about this one before.
Sarge, there has been some comment on shipping rates. I have not been keeping track of shipping rates but looked up on DryShips website where they have a nice graph of the different ship rates going back several years. To me, the rates still look to be in a downtrend. There have been a couple of spikes along the way, which have recently turned south. Again, I haven't been following this area since getting burned a few years back. If I was in this area, I would also be concerned about China. There is no way things are going to end well there.