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Strategies & Market Trends : Value Investing

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To: Grommit who wrote (36495)	1/20/2010 3:54:35 PM
From: E_K_S	Read Replies (1) of 78751

Hi Grommit - Hedged my GOV shares by selling the June $22.5 calls. This will provide me to capture two dividend cycles (@ $0.40/qtr). According to their latest prospectus, their next quarterly report will reflect all the expenses (and fees) from their most recent property acquisitions. The March dividend payment will also reflect the new share count which reflects 30% more shares. Any surprise to the declared dividend for March or June should provide me the opportunity to buy back the options I sold at $1.70/contract at some significant discount. Otherwise, my stock gets called away locking in an annualized return of 19% ($2.20/share for 6 months). I like all the aspects of the GOV REIT but am still suspect to the huge increase in shares from the over subscribed secondary and if there is sufficient cash flow from the rental income to post a sustained dividend north of $0.40/share. We should have a much better idea after the June 2010 report. This will allow me to back up the truck to buy more shares at prices between $19/shares-$20/shares w/o getting hit with a loss on my earlier buys. I am glad to get my hedge in place at my price before the secondary closes tomorrow. There should be selling pressure on the stock as the arbs close out their position. EKS P.S. Good price action on SVU in the last week. Failed to buy more shares in the $12.50/share range but I did cover my April $17.5 covered calls for $0.30/share which I sold earlier for $1.50/share. SVU surprised the street with a profit in their 1/12/2010 earnings report. Today they are finally making the ABS consolidations necesarry for long term earnings growth. Supervalu to consolidate Albertsons procurement twincities.bizjournals.com From the article:"...Supervalu Inc. plans to consolidate its five Albertsons meat and grocery procurement offices in the western United States into one regional department in Fullerton, Calif., the company confirmed Wednesday...." Perhaps they will soon announce a raise in their dividend that they cut last year.

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