Ron: Re IPT - i looked at a while ago and decided not to play. In these cases I try to determine liquidation value. If I read the situation correctly (their setup is really strange) the fair price to BREAK EVEN in 2 1/2 years is about:
2 1/2 years of dividends @ $2/yr and $3.51 (as of 12/31/96) residual or about $8.51.
I think it's probably taxable (can't tell since they send you special tax forms at end of year), and so @28% rate .68 * 8.51 = $5.78. Again, to break even not counting commissions, time value of money, etc.
To quote their SEC filings:
Less than three years remain in the Initial Term of the Partnership. Because of this, and due to the decrease in their share of earnings from 95% to 4% when the Initial Term of the Partnership expires, Class A unitholders should expect the market price of Class A Units to begin to decrease well before December 31, 1999.
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Maybe I'm missing something, but I don't see how it is possible to make money on this. The company is telling you so above! The past performance numbers look good, but they are history and bear no resemblance to the future - not with their setup. IMHO, maybe the yield is holding the stock up - if they pay $2 this year (same as last) and you got it at $10 then it's approaching 20% yield.
Also, the one analyst reporting on the company thru Zack's rate it a 5 - the worst (like in sell short) as seen at:
quote.yahoo.com
My opinion only based on quick look.
Good trading,
jim garrison |
