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Strategies & Market Trends : Turnarund Investing

NOVS 0.0666

-16.0%

Aug 1 5:00 PM EST

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From: thatsnotluck	6/25/2012 11:21:45 AM
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Hoping for some turnarunds spent some money today. back in AVP at 14.95 added to JNPR at 15.60 added to HES at 39.99 added quite a bit to ETN at various prices 37.xx also swapped my RBS-M and RBS-T for additional RBS-G. i have no clue if the price for these is too high or too low, but i am pretty confident that RBS-G is very cheap relative to the other two. at 17.50 for RBS-M, that gives a dividend yield of about 9.15% give or take. no reason i can see why a year from now the yield for RBS-M and RBS-G to be much different from one another. So if RBS-M is same price, and RBS-G pays a 5% lower coupon, call the fair value for RBS-G to be 17.50 * .95 / 1.0915 = 15.23, roughly two bucks higher than it is trading at. or if RBS-G is a reasonable price, then RBS-M is very expensive. maybe something like 13.25 / .95 + 1.60 = 15.55 give or take is reasonable fair value for the M if the price for the G is reasonable.

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