RE:RE:couple comments on spinoffLatest update and thoughts.
We have now sold 70% of our SOBO and put all of it + some extra cash into TRP. At this point, SOBO is up 1.7% from our sell price BUT TRP is up 7.1%. So far so good.
My prediction for the next month is that SOBO will not get above $34 and will get hammered on Nov 7th.
Meanwhile, TRP will contnue to climb and will announce a 5-6% increase to their divy on Nov 7th.
Regardless, it should be interesting but I do like our moves so far.
Ciao
Sarge
SargeX wrote: For those interested, here's an update on where we're at with our SOBO/TRP plan.
After the initial 15% sell of our SOBO shares at $31.05, we sold 42% more at various prices ($31.45, $32.71, $33.82) for an average sell price of $32,28. That leaves us with 43% of our intial SOBO shares and we'll let ride for now but the mid-term plan is to eventually sell all of them as well.
We put all that cash plus some extra cash towards TRP at an average buy price of $60.75. We now have as much TRP as we want (at leaset for now).
There's a few thngs with SOBO that I don't like:
- it's a pure oil play and I like gas way more.
- I think TC Energy was unfair in the allocation of debt between the newTRP and SOBO. I really think SOBO got stiffed.
- My intial calcs on SOBO's divy showed it at $2.68. I really don't like it that they unnecessarily bumped it to $2.75 especially with a payut ratio way above 100%. I'm really sick of these management groups talking up the divy and how safe it is, only to eventually cut it. Think ALA, IPL, AQN (which we owned) and REI.UN, VET, etc (which we didnlt own but just thankfully obsserved). We all know there's no divy increases for 3-4 years but I actually think there's a decent chance of a divy cut before an increase.
I'm very pleased with our moves with both SOBO and TRP.
Ciao
Sarge
SargeX wrote: We are with RBC DI and got our SOBO shares right away yesterday morning. Today, our book cost showed up as $29.51 (which is consistent with others on this board).
I didn't like the idea of the spinoff from the get-go. I would have preferred leaving TRP as it was. Having said that, I really do like the new TRP with no oil (& Keystone) and lots of gas. I thnk it's better positioned for the long run.
My initial plan was to sell all our SOBO shares as soon as possible. After seeing the action yesterday morning and the big jump is the SOBO share price, I decided to only sell 15% of them at $31.05, I then used that cash plus some extra cash to buy some TRP at $59.83.
Today, I decided that it would have been far better to have sold ~50% of SOBO & bought more TRP at my yesterday prices (but such is life). I have decided to just buy the equivalent amount of TRP at $60.85 that the extra SOBO shares would be worth and put an open sell order in at $31.45 to balance.
I will probably sell the remainder of our SOBO if it gets to $40 but will enjoy the huge divy until then.
I thought some readers would like to see our approach with the hedging of our bets with the different sell dates.
Ciao
Sarge