I did not see a separate press release on the dividend announcement and had to look through the earnings release to find it. Their i.r. person should be reprimanded for not doing a separate release. Do they not know that the HFT algorithms pick up headlines, not to mention hedge funds and everyone else looking for positive news. Why bury it in the earnings release? I hope the conference call is more positive. Besides possibly being a negative reaction to the loss number that was in the earnings release, the other negative could be that they have only closed 1 of the acquisitions in this quarter. I would like to think that the snow contributed to the delays in the closings and that there is other positive news to come soon, why else would they draw the accordion feature of the credit line.
As for the amount of the dividend being a disappointment, I'm sure others were hoping for more, but the initial amount should not matter as much if they give guidance backed by acquisition completions that lead investors to see the amount growing over time. You can put any yield number on it to get to the stock price you want to get to, but it is much easier to do so if there is growth.
Sarge, the double top on SDRL is simply two peaks at the same price. It is easily seen on the chart in the Feb and March period. Now the limit of technical analysis is that when the second of these double tops was forming, we did not know whether it was a second top, but now that it is there, that will act as substantial resistance. In other words, when SDRL was bouncing back up, the fact that it did not take out this $36+ level means that it was a good bet to go lower. This technical analysis is tough and I don't have a good enough handle on it to base my investment decisions on t.a. alone. Everyone knows by now that the one rule that I go by and that has proven to be very accurate is not to buy a stock with an RSI over 70. The list is growing of all of the stocks mentioned on this board that hit RSI 70 when they were mentioned, and subsequently sold off.
The GLNG chart is almost straight up, leading me to believe that the move is primarily in response to Ukraine and its POTENTIAL gas shortage IF Russia should turn off the spigot. Stocks that go up vertically usually come back. They need another catalyst to continue upward.
Gambler, SFL has now retraced nearly all of the big move up from late February that took it over the upperbound of its trend. This is why I don't chase stocks hitting RSI 70 levels. We will see if it finds support soon. On SDRL it seems to be going lower again after the strong defense that was mounted when it reported earnings. The downtrend line projects lower and it has a double-top just over $36. The smart money that that bought the earlier oversold condition are probably gone now. Wonder if we get a rally into May so that we can sell in May and go away.
GPT declared a first quarter divy of .035 per share. I've owned this since last year after reading a s.a article that detailed the transformation of the company from a finance REIT into a triple net lease REIT. It has taken some time to pay the accrued preferreds and now they are back to paying a dividend. Based on a previous experience with an industrial REIT, First Industrial, I bought GPT expecting that the market would price the stock at a 2% yield to begin with because of the reinstatement of the divy and potential for growth. That would be $7 based on an annual 14 cent dividend. Let's see how it goes.
Sarge, yes I think the BDCs can bounce back, but as others mentioned, this volatility may last longer than a couple of weeks. That's why you have to look at the charts to see when the chances are greater that the stocks may have reached support.
But be careful. Whenever any sector gets too popular (which anecdotally can be measured just by how many different posts that are now mentioning BDCs, their dividends, and their great (past) appreciation -- how many BDCs have been mentioned when their RSI's get to 70, but were hardly ever mentioned before?) usually means that they have now moved on to a different stage, from undervalued and unknown to known and popular, on their way to overvalued and ready for a fall. Most stocks follow this same pattern, but the difficulty is knowing when each stage will last and how to find a tool to help one see that.
Stagg, as I have been reminded, in the 2008 collapse, oil declined to $40. Never say never, especially when geopolitics is involved.
The article is "Why 2014 is Beginning to look a lot like 2008" and its on the peak prosperity blog. There's also a good article out today by David Stockman which includes some current ratios and facts that are not mentioned much.
I'm not so sure it is a weak sister, but rather it was just another of the long list of victims of the RSI overbought level. Really, is there anyone who doubts that buying a stock with an RSI level over 70 is a sure fire way to lose money in the short term.
There is a great article by Charles Hugh Smith on zerohedge that compares prior periods with today. A must read.
I think we could still be in an uptrend. The sign that we have reached an inflection point will be only after we get a selloff and the bounce does not get us back on track with higher highs.
Your comment about the "bus that we see" could have equally applied to 2008 and prior to that 2002. Everyone knew housing was in a bubble in 2008, we just didn't know what would burst the bubble and how leveraged many of the players were. Similarly in 2002, we knew the dot.coms were overvalued, but it was hard to fight the "this time it's different" mantra. I can't say when the next bust will occur and whether it will be like 2002 or 2008, but it will come -- they always do. Also, the declines are seldom straight rides down, especially now with circuit breakers. The first leg down will be met with the "buy the dip, nothing has really changed" rationale and "things are now not overvalued." It will be followed with a bounce. The second leg down will be more problematic, although it will be met with the "certainly the Fed will start another round of QE" logic. Even those who are looking for these breaks will still miss them and lose some money.
The market climbs a wall of worry, but it also can fall when it gets the proverbial last straw. Current worries are China and their credit/property bubble, the response to the situation in Ukraine, and the continuing Fed tapering.
Looking at a chart of the S&P, it touched the upper line of its channel, and backed off, but it is still holding in the middle of the channel. It has done this in past moves up that hit the upperbound.
Interestingly, there has been some commentary that what would hurt Putin the most is a decline in oil prices as Russia's budget is dependent on oil revenues. Do you think someone could engineer a collapse in oil prices?
Not delisted, but removed from a couple of the indices that they were a part of. There was also talk that a new index would be formed and possibly an ETF that mirrored that index. The point is that they could see new buying if these indices/ETFs are formed. Since BDCs have gotten quite popular, you can expect Wall Street to roll out several new products to play this popularity. At which point, that will be the sign to exit.
jk, there have been many articles about how the biotechs are in bubble territory. Can be dangerous trying to short a parabolic move as you never know when it is going to end, just that it will end at some point. Puts on the index are probably a safer bet.
Ed, don't know if you are still playing with iron ore (MSB), but read recently that stockpiles are sky high in China and the price is headed down.
I don't know what happened recently, but it seems that all of a sudden, tempers are flaring and people are talking about abandoning the board for a "better" board somewhere else. I have mentioned frequently that I am a reader of the minyanville website in which the founder, Todd harrison, writes frequently about social acrimony and the effect of psychology on investing. Is it ironic that on the anniversary of a 5 year bull market in which the gains have followed the Fed's QE in lockstep fashion, that all of a sudden it is becoming a little less easy to ride and pick winners? Could this be the start of the social acrimony that signals an incoming correction, or worse, a bear market that just hapens to coincide with the Fed's tapering?
I know people will say that the bears have been warning about a bear market for the last 5 years, but the historical fact is that bear markets have not been outlawed and they do come, most of the time, when people are not expecting them. The fact that I am mentioning this probably means that the bear is still off in the future.
I believe one of the purposes of these boards is to discuss different points of view and to help everyone achieve better investment results, by seeing both sides. You have to sell to actually pocket an investment gain. If investing is just about buy buy buy and never selling, what would be the point in discussing? We can disagree without becoming disagreeable. But we also don't have to become a rah-rah "Chip and Dale" message board either where no dissenting or opposing views are ever allowed. There's a lot to be learned from other investors experience and research, so let's keep the discussion flowing.
Keebon, I'm not an expert on these patterns, but it looks like SSW is forming a wedge or pennant, which I understand is when a downward line intersects with an upward line. As I remember from minyanville, the stock can go either way. So if it breaks to the upside and pierces the upward line, it will continue upward, and vice versa. I know to most this sounds like voodoo and doesn't provide much guidance on how to play the stock.. But the other view is that this is the point of technical analysis, i.e. the emerging stock pattern is like a map with a direction that leads to a destination. Fundamental analysis provides the same criticism: you don't know if improving fundamentals will continue or whether they have peaked and are already discounted in the stock price. Instead of getting stuck in a certain opinion or view of a stock, let the chart give you a hint as to what direction it is going.
I hope this helps.
Sorry for the long-winded response. At one point, I owned each of PER SDT and CHKR, which were all issued within a short time of each other so I had to deal with that same question. Still have a portion of PER in a different account. The run-ups into the distributions and plunges after the ex-dates are more pronounced on SDT, SDR and CHKR. There are several ways to try to grind out a profit or at least come out even. One can try to add some and then sell into the runup into the distribution. Those runups typically start about 4-6 weeks before the distribution announcement. The next announcement should be the end of April so we are in the period to put that play on. The other way to play is to buy puts, especially if the distribution announcement has some negative news, but as I said, PER is holding up better. I have played puts successfully on CHKR SDRand SDT which have more disappointments tied to production issues.
I think the Dan Moore article mentioned that the distribution on PER will likely decline into the 40 cent range in late 2015, so the market will begin to anticipate that; meaning that if the share price should pop up for any reason before that, you should probably pull the trigger and sell. The other thing is to think of any loss that you may have as a deferred tax asset that can be used to offset other gains.
Theses types of trusts are depleting trusts and are not permitted to add any new properties. They basically pay out their production over time. Even though there is new drilling, the sponsor is only required to drill a set number of wells.
Most of these trusts, PER, SDT, SDR and others, have had problems in that the production originally projected has fallen short - this is mostly for those that have big Nat gas %, not so much with PER which is mostly oil. Their decline rates have been higher and many have missed their target distributions and are not earning enough to pay the sub units. Also many produce Nat gas liquids and the price of NGLS has declined because of so much supply and other factors.
Your observation about the post ex-distribution date action is correct. Because the reported yields are very high, investors push up the price before the distribution, with many retail investors not realizing that the market maker adjusts the price downward on the ex date. That adjustment is around 4% because of the large distribution! which can cause technical selling. Each quarter there is usually a negative article which adds to the selling pressure. The recent analysis by Dan Moore reviewed the year-end PV 10 report which is a year end estimate of the present value of the remaining reserves. That PV 10 value was around $11+. But that can change year to year based on production and future prices.
PER is holding up better than the Nat gas trusts both on the production side and price of oil. Nat gas prices had dropped a lot before the recent rise this winter..
One can certainly try to trade the price increases up to the distribution and play puts for the inevitable decline, but there' seems to be more volatility with the gas trusts. I still own some PER but would consider selling if it ran up into May's distribution. Despite the apparent 20% yield! total return is probably negative. You are eating your principal and getting taxed on a good percentage of it.