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awallejr (80.10)

GMXR preferred

Recs

8

February 02, 2012 – Comments (5) | RELATED TICKERS: GMXRQ

I was doing some yahoo message board surfing last night and for some reason I wound up on the GMXR board.  I noticed a news article by the company issuing 2012 guidance.  Basically the company has Nat Gas wells, but in light of the low price of the same they decided to shut them down and concentrate on their Bakken oil leases.  Personally I thought that was actually a good strategic move.  I then noticed someone talking about the preferred shares.  Sure enough they have 9.25% preferred shares off of a $25 face value and they were selling around $6.  $2.31 divy on a $6 preferred stock  is worth consideration.

Today I watched the action and finally bought it at $7.69.  A 30% return on a preferred stock that does not give the impression of BK is really worth investing in, especially in light of all the buzz about Bakken.The sucker went to over $10 then settled at $8.75.  Even at that price I still think it a bargain and will wind up buying more.

Just giving you Fools a heads up on a potentially nice multi bagger paying a tremendous yield.  Yes there is risk but you don't get rewards like this without taking them.

Here's the guidance link by them:

http://finance.yahoo.com/news/GMX-Resources-Inc-Provides-pz-1459613977.html?x=0

5 Comments – Post Your Own

#1) On February 03, 2012 at 12:26 PM, awallejr (80.10) wrote:

Wow this sucker took off today, almost hit $14 now at $12.75.

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#2) On February 17, 2012 at 10:53 AM, roy144 (< 20) wrote:

I bought it on the day it went from 6+ to whatever. I made one mistake. I bought 26000 shares at market. Because of low trade volume I drove up the price on myself but I still have doubled my position since. I believe they have a great future.

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#3) On February 17, 2012 at 12:47 PM, awallejr (80.10) wrote:

Unfortunately I noticed this stock too late.  I generally commit 1/3 to 1/2 my dollar limit for a stock and then add the balance over time.  This one flew by fast and seems to have settled in the $14ish range. Dilemma is normaly I would sell half my position on a double, but I still like the dividend yield at current price.  And yield is what I look for basically.

I suspect the market is just waiting to see if the company will continue to pay the dividends, next one due Mar 31st I believe.  Once the market is satisfied that the company will continue to pay I suspect this stock will inch up into the $20s.  Since the quarterly cost is around $1.5 million I would be surprised if the company skips the payments. 

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#4) On January 06, 2013 at 8:43 PM, TMFDeej (99.47) wrote:

Wow, cool find awallerjr.  I love posts like this.  I always find preferreds fascinating.  I don't know any specifics about GMXR, but my one super-distressed preferred purchase didn't work out that well...ATP Oil and Gas preferred.  Yuck.  Fortunately I kept the position small, so the overall impact of the BK to my portfolio was like shooting a pea shooter at an elephant.

Kudos on this one, you're sitting on a two bragger with a huge divvy.

Deej 

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#5) On February 21, 2013 at 7:07 PM, awallejr (80.10) wrote:

Oh and just saw your reply Deej, thanks.  I lost on the ATPG preferred too but I feel much better about GMXR, see my new blog on it.

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