Yes return of capital distributions depress the share price, but if you participate in the fund DRIP you can re-invest those distributions for more shares at NAV (booking an immediate gain if the fund is trading at a premium).
The share price may drop, but total return can be attractive because of the much higher number of shares acquired.
randy- While CFP is not technically organized as an interval fund, but it functions almost identically.
Instead of repurchase offers, they simply pay out about 2% a month. For those who want cash, it is equivalent to a 2% payout at 100% NAV. (or 24% a year)
If you don't need the cash. you can reinvest at NAV which is equivalent to declining a repurchase offer.
Petar- A better term for the Cornerstone funds than Ponzi scheme are "interval funds". Type this into google for more info.
They return a lot capital to investors on a regular basis so that it is less likely that a big discount to NAV will ever develop. I wish some of the other CEFs that trade at 15% discounts copied Cornerstone's approach- the discounts would shrink overnight.
Since year-end, there has been an uphill trend, not a down hill trend.
I just checked the year-to date returns for CFP (adjusted for dividends). The S&P 500 is down for the year, but CFP is up 10.5% (even higher for those who participate in the DRIP).
Those of us who trade CFP, know there is a seasonality aspect to it. The time to sell is the end of the summer.
The two funds are merging, but CLM will be the name of the surviving fund, CFP shares will convert into new CLM shares.
Net production was 312.9 Mboe, up 39% from the 225.4 Mboe in the third quarter of fiscal 2014.
Total revenues increased 22% to $20.3 million from $16.6 million in the third quarter of fiscal 2014.
Adjusted EBITDA increased 669% to $33.2 million from $4.3 million in the third quarter of fiscal 2014.
Adjusted EBITDA for the quarter included $21.5 million, net of allowance, attributable to the Company's application for a carried forward annual-loss credit with the State of Alaska, lower general and administrative costs, increased net cash receipts on derivative settlements, offset by additional costs related to the Savant acquisition.
The Company has hedged production for 191 MBbls at $97.09 remaining in fiscal 2015, 788 MBbls at $95.36 in fiscal 2016, and 233 MBbs at $93.97 in fiscal 2017. During the three months ended January 31, 2015, Miller recorded a non-cash gain of $39.3 million related to this favorable crude oil derivatives position.
CLM shareholders will take over about $6 million of tax loss carry forwards from CFP. CLM currently has a lot of unrealized capital gains and can use these tax losses.
(No value if you hold CLM in an IRA, but quite valuable in a taxable account).
RO is a rights offering.
It is possible that CRF will have a rights offering later this year because its premium is above 7%. CFP needs to go up some more to get to a 7% premium before it has another rights offering, although that could easily happen by the summer.
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System 1: Rotate each week into the fund with lowest premium.
As of today's close :
CRF +17.67% premium CLM 8.04% premium CFP -1.03% discount
CFP would be the system #1 choice as of today.
System 2: Rotate each week into the fund with highest yield.
As of today's close:
CRF 18.4% yield
CLM 20.3% yield
CFP 22.4% yield
CFP is also today'c choice using system #2.
For less active investors, you could do the rotation monthly or quarterly and still get decent results.
Run google or bing on "market on close" order (MOC). These are special orders mainly used by institutions or professional traders. Trades execute on NYSE or AMEX. Orders must be submitted by 3:45 PM and cannot be cancelled. The t ime stamp for these MOC orders is always after 4PM.
I sometimes use them myself at the end of a quarter when you can sometimes get a good execution.
ezmoney- Interesting theory. I just checked the CFP annual report for year-end 2012. The CEF percentage was even higher than now! I think the Cornerstone guys have always held more CEFs in CFP than in the other two Cornerstone funds.
For what dates did CFP have under 50% in CEFs?
Cornerstone Progressive Return Fund
Portfolio Summary – as of December 31, 2012 (unaudited)
Closed-End Funds 88.9
Information Technology 2.5
Consumer Discretionary 0.8
Health Care 0.6
Consumer Staples 0.6
Telecommunication Services 0.3
Have some patience : )
Over the last five years, CFP had an average premium of 20%. It's just a matter of time before a premium develops again.
Discounts/Premiums as of February 13:
Some investors were concerned that CFP might eliminate the managed distributions because of the discount. But they just announced dividends to be paid through June.
CFP will likely trade at a premium soon to keep up with the other two Cornerstone Funds.