06-28-2012, 12:24 AM
(This post was last modified: 06-28-2012, 12:28 AM by ValueSleuth.)
With the stock surging this morning, the 8% Perpetual Cumulative Convertible Preferred (ATPGP) is a compelling buy, IF (and that's a BIG IF) you believe the company will avoid bankruptcy -- which I do.
The valuation between the Common Stock and the Preferred issue is all relative and jumps around a lot.
Trying to purchase the Convertible Preferred can be very tricky. You'll be ripped off if you don't use limit orders and play the game.
As I type, the premium to conversion is NEGATIVE and over the next three years of dividends (IF they are paid) will result in recovering more than the price of buying the Convertible Preferreds today (last trade $14.10 vs $8 annual dividend). I believe this situation is due to the fact that the Convertible Preferred went ex yesterday and a lot of the issue was dumped at that point, driving the price way down. With all the negativity, and perhaps some end of quarter dumping, margin calls etc. in the common, it may well present a "buying opportunity" of epic proportions. (I was buying yesterday.)
For the HIGHLY VENTUROUS, this has a greater potential for price appreciation than IOC, believe it or not.
VS
The valuation between the Common Stock and the Preferred issue is all relative and jumps around a lot.
Trying to purchase the Convertible Preferred can be very tricky. You'll be ripped off if you don't use limit orders and play the game.
As I type, the premium to conversion is NEGATIVE and over the next three years of dividends (IF they are paid) will result in recovering more than the price of buying the Convertible Preferreds today (last trade $14.10 vs $8 annual dividend). I believe this situation is due to the fact that the Convertible Preferred went ex yesterday and a lot of the issue was dumped at that point, driving the price way down. With all the negativity, and perhaps some end of quarter dumping, margin calls etc. in the common, it may well present a "buying opportunity" of epic proportions. (I was buying yesterday.)
For the HIGHLY VENTUROUS, this has a greater potential for price appreciation than IOC, believe it or not.
VS