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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (44334)	9/14/2011 3:33:32 PM
From: Paul Senior	Respond to of 78576

EKS. GST pfd. Okay, you convinced me. In for a starter now. Noting I missed this month's dividend (record date tomorrow). Otoh, stock is down now by the amount of the dividend. Just saying. -- In the scheme missing a monthly div won't or shouldn't make any difference anyway.

To: E_K_S who wrote (44334)	12/16/2011 5:09:50 PM
From: E_K_S	1 Recommendation Read Replies (1) \| Respond to of 78576

Gastar Exploration 8.625% Serie (GST-PA) An inefficient market can provide a "Value" opportunity. Today there was a seller of 20K preferred shares that wanted out of this security. I noticed that the 20K share sale was made in the AM (extremely high volume for this stock) which meant that the Market Maker was a forced buyer of these shares. To square his book, the Market Maker has to lower the price to attract new buyers. During the day the price drifted lower (as much as 10%) until he made back his inventory of shares (those he was forced to sell earlier in the day). Once that was completed, the stock drifted back up to it's open day "fair value" price. This occurs because of the lack of liquidity in these types of securities. Today I added a few shares of GSTpA (which I believe I got on sale today) and swapped out an even number of fairly valued MHRpC shares. These types of forced sales occur only a few times a year (unless there is some negative company specific news). I suspect it might have been a large investor (or institution) doing some end of the year closing transaction. Earlier this month, there was a 90K share block that traded at $19.50/share. This has been the previous price support level. To me, the $19.50/share price appears to be the fair value based on the company finances, where similar preferreds trade w/ similar risk and the relative yield of 11%. ----------------------------------------------------------- The hidden fact is that Atinum Partners Co. ( atinumep.com ) has a significant vested interest in GST. They have financed GST's 2011-2013 drilling programs and are their JV partner in these deals. For more detail see my earlier posting titled " The South Korean Investor - Atinum Partners Co. " Message 27635227 ). One of the possible end plays for GST is that Atinum Partners buys the company and folds them into their E&P operations perhaps packaged and then sold to a Chinese consortium. The GSTpA securities would then be paid off at Par ($25.00) and even at some premium to par if occurred before 2014. EKS