Thanks for your deep insights. Yes, I am crying like a baby.
Although, I am a little surprised they have wi-fi at your re-hab.
Were all trying to catch the bottom, some will, and some won't. When it all converts the point will be moot, as the price will begin an up trend for a good while. GLTA
Just to add, KMI will move up the ladder in the various indexes due to its increased market cap. The weighting of the indexes will bring buys from the indexes. This will bolster price appreciation and because of the passivity of indexes will have a somewhat stabilizing effect. While not a major mover for KMI, certainly a positive factor.
I posted some math on the KMR board "The case for buying KMR over KMI"
My #'s show a 2.6% advantage favoring the KMR buy which includes the upcoming div.
Today's prices KMI- $40.26 KMR - $97.72
Conversion rate - 1 share of KMR = 2.485 shs of KMI at year's end.
(KMI) $40.26 X 2.485 = $100.06 Less (KMR) price $97.72 = $2.32 (KMI) premium
KMI upcoming div .43 +/- KMR upcoming div $1.38 +/-
.43 X 2.485 = $1.06 or .32 less than KMR upcoming dividend
$2.32 KMR discount + .32 additional KMR div = $2.64+/- per share benefit for buying KMR over KMI.
This is a 2.6% upside for the remainder of the year. The 1 month chart shows both are trading at a consistent difference of 14-15 % since the Aug 11 announcement, essentially trading in tandem. Should they remain in this pattern, buying KMR would reap a 2.6% advantage.
Actually, same amount of shares (2.4948 shs of KMI per shr of KMR).
However, buyers would have already bought in (support) at prices well north of $51.
The deal was based on $89.75 or thereabout. The conversion ratio will stand whatever the price at the time is, by my understanding.
Low volume, weak hands shaking out, maybe some profit taking. Buyers lying in wait.
2.5 X $40.06 (KMI) = $100.15. That puts today's KMR at a $2.77 discount to KMI (conversion rate).
Price is chained to KMI by virtue of the announced deal.
Consequently, as KMR price drops, buyers come in and price levels out to KMI conversion ratio.
Just the usual sharks circling the boat. A lot of chum in the water.
RK can ante up a little more if they pose any threat.
I'm sure it was anticipated. KMI will power forward.
I suppose RK was thinking like that!
We shall miss all the discussions of the KMP/KMR spread and discounts/premiums since its soon rendered moot.
Will also miss those discussions about splits-mini-splits, fractionals, etc.
Just dividends and 1099's in 2015, although I will welcome the div growth.
I'm staying for the conversion. GLTA
Probably are some sellers taking the div but the market was down and that probably accounted for most of the retreat.
Divdends 101: Applying the doctrine of Buy Low; Sell High, there is usually a price run-up a week or so before the ex-div in these high dividend stocks. Many people 'but the dividend', some sell later. However, often the best time to sell is a few days before ex-div as the price is "engorged". Typically, the price begins to recede post div, and somewhere mid qtr (excepting events) the price sweetens for a buy. This is a common but not always ebb & flow. Check the charts to confirm this pattern. Set your limit price and adjust when it gets close.
KMP may not be a good stock to buy & sell often due to the tax complications with K-1's. However, such strategies may work better with KMR, the twin sister of KMP. I am long KMR and only buy infrequently.
Insiders are likely to be in the 39.6% tax bracket. They may have deferred shares via stock options, also other tax qualified accounts (IRA's) etc, but when they buy big it is usually taxable. They exploit a low share price or an opportunity for a large gain by virtue of their inside knowledge (legally). I was suggesting that us retail investors might follow their lead.
To be clear: following ex-div, the new dividend gets slowly baked in until expressed at the next ex-dividend. At ex-dividend the share price reduces by the amount of the quarterly dividend. The market fluctuations then take over in whichever direction the market dictates.
Incorrect! Ex-dividend means the stock trades 'without dividend'. Holders of the stock prior to Ex-dividend date receive the dividend. The ex-dividend date is usually 2 business days prior to the Record date. This is because it takes 3 trading days for the transaction to be recorded. The Payment date usually follows by 2-4 weeks. Hope this helps.
Important to research these dates more; they are important. $ can fall thru the cracks easily. Good luck.
The spread is irrelevant.
LINE - 30.95 - yield 9.3%
LNCO - 29.66 - yield 9.6%
Their tax structure is different. Returns over time will be very close to each other.
Real question is: Which one are the insiders buying?
That boat sailed. The rights offering was completed. The offering was to buy in at $9, a discount from the NAV. The price is still lower than his entry point so if he added he would lower his cost.
Be aware though that these Gabelli Funds are leveraged, that is, they use separate funds to increase returns. However, in Market downturns the leverage works against and the fund losses price more than the market in general. Some people use such an event to buy more. I am just saying be aware. If your dad's in for the long haul, the returns will overcome. This fund sheds a 10% dividend, that is nice income. BTW, they do not borrow the $ to leverage but get the $ thru the preferred shares. Might want to check that out, many AAA rated. Good Luck in your investing.
Ouch! Almost 6X volume, apparently the Rights Offering & oversubscription shares were added causing dilution to the price per share. Looking for a rebound in coming weeks.