Bought today at $3.45/share. Also sold September 5 puts for $2.05/share. Average cost if not exercised will be $1.40 per share. Average cost if exercised will be $3.20 per share. That, my friend is how you buy below the market price.
Sentiment: Strong Buy
MAV's NAV is lower than MHI and they now pay the same dividend and MAV is more leveraged. Doesn't make much sense until MAV comes down in price to compensate for risk.
LINE's bonds have crashed today from about 15 cents on the dollar to about 5 cents. This is telling me the equity is worth zero. Simply too much debt.
Frankly I'm surprised the share price is this high. Must be short covering. The shares are most likely worth $0. The bonds are now trading at around 5 cents on the dollar. Even some of the bondholders might not make it given all the debt.
Then why would the preferred be yielding less than the bonds? Preferreds are soaring today. I guess it's bond liquidity market problems.
Agreed. You would think they would go up since they are being more conservative with cash. Bond traders must think company is worse off than projected.
A good entry point would be at around 1.25/sh which yields around 12% with this new distribution.
Based on where the preferred are trading I think a better play is to buy the bonds. Coupon is 7.875% but currently trading at about .55 on the dollar, so actually yielding a bit more than the preferreds and more senior in cash flow. Mature in 4/2020 so the yield to maturity is actually a bit over 25%