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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4738)	9/28/2001 3:43:27 PM
From: Logain Ablar	Respond to of 33421

John: On NAT The div payout is made up of two parts 1) The basic flat rate BP has to pay. This is flat quarterly and what equates to the $1.36 (=/- a few cents for expenses). I think this is appx 22k (13k hire and 8k expenses) per day. 2) The additional amount if sumex tanker rates are above the basic flat rate. When the day rate was between 55k and 60k this is when div peaked. Part 2 the additional amount is determined after the quarter and is paid in arrears so it is paid out as a dividend in the subsequent quarter. So as lease rates decrease the payout is higher this quarter than what you would have next quarter. On its way up the stock traded @ 13 to 13.5% of the trailing dividend (from memory, I haven't owned since Jan). castaliapartners.com I also think (need to go find my documents to check) NAT is paying off its note by 2004 which was incurred to acquire shares (which means a higher dividend if bp renews) and Nightbridge is only paying interest and its note was for the ship acquisition. Also Nightbridge renewal with shell will be for 7 yrs while NAT / BP is one year annuals. Nightbridge renewal also calls for higher daily expenses on renewal (equates to lower div) If NAT were to reach $10 it would look very tempting. The one thing I hate (really) is it is so illiquid. So you have to keep that in mind when buying and selling. $10 was the level company had the dutch auction last time. Also I have to read the notes but the companies BP and Shell have to pay the basic lease charter come hell or high water (I think that is the term) so even if a ship sinks the lease is paid. I have to check NAT but Nightbridge has all the indemnifications (incl environmental) and if a ship sinks Shell has to pay FMV of like ship @ the end of the charter.

To: John Pitera who wrote (4738)	9/28/2001 4:05:40 PM
From: Logain Ablar	Read Replies (2) \| Respond to of 33421

John: Although long winded I don't think I answered your question. NAT is no longer @ 13%. Actually with rates coming down the trailing dividend is 19% per yahoo. I think this will bottom @ 13% (the $10 price / $1.36) but it can bottom @ 11% (the $12.5 support / $1.36) Note the $1.36 is the minimum dividend so %'s can change and we may not see those targets. I assume the question is why is NAT selling @ 15 area when even a minimum payout of $1.36 equates to 9% and interest rates are much less. I used to think it would bottom @ this level but if OPEC cuts production (not till next year) and we have more tanker supply in 2002 then the $12.5 to $10 range comes into play. You also have to factor in the JP factor. As you keep discussing it your followers have become aware of it <VBG> and we may never reach my bargain levels <VVBG>. Even Heinz owns some and LEE III is looking into it. There is more demand and less supply so the yield should start to decrease. In the old days mike and I were the only ones discussing this dividend stock <gg> Actually @ this point I would wait till the next dividend payout. The stock sells off on the record date. Tim