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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (8383)	3/23/2011 1:05:07 PM
From: Bocor	Respond to of 34328

welcome back! Missed your contributions!

To: chowder who wrote (8383)	3/23/2011 1:33:37 PM
From: RumbleFish	Read Replies (1) \| Respond to of 34328

Thanks for that, dabum. I own STON--and I assume others do as well. I'm aware of the negativity and red flags surrounding it. But it's a small position and nothing negative (div cuts or suspension) has happened yet. I'll probably hold on until (if/when) these things happen. I'm well enough diversified that this position going bad can't hurt me too much. My own history tells me I make more mistakes selling too soon rather that holding on too long. If I were a trader, though, I'd already have dumped it.

To: chowder who wrote (8383)	3/23/2011 4:27:25 PM
From: Bocor	Read Replies (2) \| Respond to of 34328

I also own STON, but following the general rule of thumb from "someone" on this thread, I own very little that is more than 3% of my portfolio; certainly not STON. Based on all the negative news, I am surprised it hasn't gone down more. The recent issuance of new shares may well limit capital gains potential for a while, but I will be reinvesting at a lower price; I am in no hurry. On the positive side, if STON uses the funds to pay down debt and for further acquisitions, my distributions might actually increase. I was somewhat more concerned when Jim Cramer stated that STON doesn't have enough earnings to cover its distribution. However, according to Carla, and most who know more than I do about these investment vehicles, the key metric when evaluating an MLP is distributable free cash flow, about which Cramer may not know or care. From that point of view, STON stated that for the first nine months of 2010, its distributable free cash flow was $23.472 million and distributions were $23.340 million,thus it's making it's distributions, at least for now. The company also raised its distribution twice since the third quarter of 2010, which suggests management either believes the distribution is sustainable, or this is a ponzi scheme. Time will tell. It seems to me that the negative sentiment that has surrounded the stock recently isn't going to get much worse.