davebugs, you are so right about this thinly traded stock. I've been watching Level 2 this week and how the shares move...there are definitely algo systems playing with it and forcing the shares lower.
but that's actually ok by me. I've wanted to buy shares previously. I've seen the insider purchasing, previously reviewed the financials, and am well aware of the business situation. throw in Mario owning over 20% of the shares, the pile of cash, and the secure dividend approaching 5% - what's not to like?
so, I say let the algo systems play their games ... I'm needing more shares in my portfolio...I've been sitting on lots of cash just waiting to put it in to some solid companies that have been unjustly trashed and this is certainly one of them.
will we get to buy shares below $15? I bought just above $15, so if we're going lower, let's make it a nice amount lower - say $13.75 to $14.00. I won't get my hopes up though.
it was Russell reshuffling day - many stocks had ridiculous volume on the close or immediately after the close...generally all in one or two trades. AP was removed so there was a lot of volume as those index funds holding shares exited.
google for "2015 russell index additions deletions" and then go to the first link.
from the page on the Russell website, in the left menu, choose "Index additions and deletions» "
in the table returned, you can click on the index and Additions or Deletions and see what was changed. If you check Russell Global and Russell 3000 for the Deletions, you'll see AP in both.
the shares finished weak today. so unless there is a very strong rally at the open tomorrow, you can probably get shares under $14.70 without difficulty.
Even though you were down 1.38% - that's not really bad at all considering the indexes were a fair amount worse than that. As long as you're comfortable with everything in your portfolio, what happens in the market is just noise.
there is simply a lack of buying, and in the absence of buying, the market makers just push down and we know at some point someone will get fed up enough to toss their shares. sounds like you're just about there. when you have those thoughts, more times than not, it's probably better to buy more shares.
there are buyers out there, but they are smart enough to know that they can just put their bids low and the market makers will drive the shares down to them.
I've decided I'll just buy at the ask periodically nibbling here and there. you place one small market order and then the programs all react and the bid/ask moves around wildly. I did it about 10 minutes ago.
I know the shares are undervalued. However, there's no way that I'm going to buy my entire position at one time. I'll just step back, take a little here and there and let it come lower. until there's a catalyst, or some fund wants to add to their position, why gorge?
tough call. however, you need to ask yourself if the reason you originally bought at $13 still holds today. if something has changed and is in opposition to your original investment thesis, then you should consider selling. if your original investment thesis still holds, then you are being given a gift to acquire more at such a discounted price and the ability to lower your basis. maybe the shares do not go back to $13 - but how about $9 or $10? do you have something else that you want to invest the money in that is better than MFRI? things to consider.
1. just prior to shares going ex-dividend, there will be a segment who will sell. in general, shares tend to dip lower right after the ex-dividend date and these folks look to be out of the shares so they avoid that dip...as we see today.
2. there would certainly be some insider purchasing, or potentially company buyback of shares with the price so low. however, being that it is after end of the quarter and the earnings have not yet been announced, it is a restricted period where company and insiders cannot be buying or selling shares, unless there is a 10b5-1 trading plan in place to allow it. many times, short sellers will take advantage of this, since there is nothing company can do to provide some floor under the shares until the earnings are announced.
looks like BlackRock unloaded 300,000 shares since February - but that was prior to 7/10 when the 13G filing was made. Maybe they are continuing to unload all their remaining shares? let them - at breakeven, the cash will support the dividend for over 10 years.
also looks like Gabelli has been picking up a few shares.
I can see how your strategy would work out nicely with AP...especially as the shares go lower if you accumulate more...so long as the company does not ultimately blow up. So long as your margin interest rate does not go (much) higher, the differential between margin rate and dividend rate, which would be deductible, means that so long as the shares eventually go higher, you should do well.
Well, then I'll never be interested.
There are other/similar/better out there at this time with insiders putting their money where their mouth is.
Market is completely irrational - nothing "applies".
Cash rich, low debt, cyclical stocks are good whenever they are cheap .. during the bottom of a cycle.
algo games - going down on no volume
watching Level 2 you see it. no volume, the systems play with each other moving bid/ask around. then 1 share will trade and they will all move around again, settling with bid/ask 5 cents lower.
agree with all your points.
company needs to show a return to profitability - even a miniscule profit.
seriously doubt it is Mario. AP is exactly the type of company/stock he likes. if possible, I would suspect he's looking to buy more at these silly prices.
as davebugs has mentioned in prior posts - it's what happens with a small cap/small float stock - it can be pushed all over the place quite easily even with small volume.
though it will play games with your mind, and make you question your investment thesis, it also provides extraordinary opportunity.