You may wait a long time for a bounce back. I suspect oil will drop into the 30's and that's going to take this and similar company's to almost bankruptcy.
I think investors should be more concerned about the preferred than the common as that's a given that the diivy will evaporate with the common with oil in the 30's.
I still think there were many investors AND HEDGE FUNDS that borrowed at close to zero percent to chase yield and are liquidating or being forced to sell due to margin calls.
Since this is energy related, chevron has a very bad day as well as Exxon and the whole energy sector was pulled down.
I am NOT buying anything even remotely energy until oil turns up and I suspect the 1st shot at that is $42-$44/barrel. We are close but if oil breaks $42 that could bring oil to the 30's and every energy company will fall with it, including this one.
Do not try and catch falling knives. The yield on this company is large but the capital losses could get huge and take a long time to recover. If you bought this morning you are already down 57 cents and the upcoming divvy is 42 cents. One is already underwater on this buy......that's assuming u keep the stock for the divvy but I'll almost bet when this stock goes ex-div the price will drop MORE THAN the divvy driving one even deeper into the loss column.
GLOP is NOT a normal MLP. Since the income (distributions) are not deferred, it shouldn't affect this company/
As far as I'm aware of, there is no tax deferment with DLNG. This is not a normal MLP. Not sure why they call themselves a MLP but there appears to be more advantage buying TGP than DLNG as far as tax consequences go. It appears that GLOP and DLNG are "different" than any MLP's I own. True MLP's declare distributions and DLNG & GLOP declare dividends. Big difference.
Because there is no tax advantage I may pass on owning these two LNG company's long term. My philosophy is NOT to pay any federal taxes on my investments. I'm trying to stave the government beast and cannot do that declaring my dividends each year..
First of all this stock has a loss of 30% from mid May to yesterday. That is destruction in my book. At 11% it will take you approx. 3 years to recoup that capital assuming no increase in share price.
From the looks of the chart and the industry this stock could easy trade at under its 2014 low of $13.65
11% looks good but not when one has lost 30% of their capital.
I do think the price will get to $44-$45 a share. When she broke strong support at $55 next stop is around $45. But what a steal it will be at $45
My calculation for the 1st low/turn around is around $24.60. A fair way from where we are trading now. I wrote about it but no one commented on instead they just continue to catch falling knives.
Dead cat bounce. It traded BELOW its lower bollinger band and its being pulled back up like an elastic band and will probably trade sideways to down soon.
Sit on your hands and don't expend capital on a falling market. Wait for a turn or at least until it gets close to paying its next divvy.
This probably says it all for the destruction of the price for this MLP. With no growth in distros, it will be difficult to make a turn around from this correction. I actually thought they would increase the distro but now I have to re-evalute this company for long term hold. However, last year 2014 they did not increase distros between 2nd and 3rd quarter and then did in 4th quarter.
Unlike GEL,WES, EPD and others I own everyone of them has been raising distros every quarter for as long as I can remember.
Maybe its the 3,000,000 of 9% preferred stock that's holding back the increase?
I do expect the price to keep falling after this announcement.
The distro is 38 cents/quarter. It may take years for investors to recoup their losses from $40/share.
Like 8 years
But please do not think that you have no loss just because you haven't sold the stock. They are called UNREALIZED LOSSES and they are just as real when you look at your net worth....marked to market
If you look at a chart DLNG has been having a slow walk down all the way from Late May. I have no idea where this is going to finally halt the slide. The yield is now 11.5% and that could go higher.
But what's 11% when capital is being destroyed at a faster rate.
The volume is light basically 100 and 200 shares trades and no buyers. GST just sold some land and so they have money but I honestly don't see them deferring the divvy. I too am surprised at the takedown in preferred and can only summarize that there are a multitude of MARGIN CALLS that were searching for high yield on borrowed money.
It is amazing how the preferred have fallen. You would think that all energy company's will be out of business by Oct 1st. Not only Gastar but vanguard along with many others.
Can't figure out why people are throwing these income equities away? Maybe they need the money for margin calls?