3SOF

GMR (General Maritime Corp.)

General Maritime Corporation provides international seaborne crude oil transportation services primarily in the Atlantic basin, including ports in the Caribbean, South and Central America, the United States, western Africa, the Mediterranean, Europe, and the North Sea. The company also operates vessels in the Black Sea, the Far East, and in other regions. As of December 31, 2005, it operated a fleet of 27 vessels. The company�s customers primarily comprise oil companies, as well as oil producers, oil traders, vessel owners, and others. General Maritime Corporation was founded in 1997 and is based in New York City.

Market Cap (intraday): 1.27B
Enterprise Value (20-Feb-07)3: 1.24B
Trailing P/E (ttm, intraday): 5.53
Forward P/E (fye 31-Dec-07) 1: 14.48
PEG Ratio (5 yr expected): 0.76
Price/Sales (ttm): 2.92
Price/Book (mrq): 1.60
Dividend Rate: 2.84
Dividend Yield: 7.60%

This popped up on my fundamental filter using MSN stock screener deluxe. The chart looks great volume is picking up fundamentals are solid and has a 7% divy as well. If the price of oil goes north it will push the PPS up as well.

I applaud you...great find..

Technically, we can see a cup and handle formation...

Thanks sebfr,

Earnings are coming out this wedsneday 2/21 for GMR.

This doesn't make the least bit of sense to me...are you telling me that if you hold the stock through close on March 9th, you'll get $15/share a couple of weeks later, and imminent collapse of the stock price on March 12th?



Feb 21 (Reuters) - Oil tanker operator General Maritime Corp. (GMR.N: Quote, Profile , Research) said its board has declared a special one-time cash dividend of $15 per share.

The dividend will be paid on or about March 23 to shareholders of record as of March 9.

The company said its board has revised its quarterly dividend policy and set a regular quarterly dividend target of 50 cents a share per quarter, starting with the first quarter of 2007. (Reporting by Sankalp Saini in Bangalore)

Up over 10% in AH, another play I didnt play , I did a paper trade on it. At least I know my stock screener filter settings are picking up good stocks.

Quote from: nutsterrt on February 21, 2007, 06:20:08 PM
This doesn't make the least bit of sense to me...are you telling me that if you hold the stock through close on March 9th, you'll get $15/share a couple of weeks later, and imminent collapse of the stock price on March 12th?

Sounds too good to be true, doesn't it.  I know when I first started investing I thought the same thing, how could they do that and announce it in advance.

Well after seeing many many of these, what usually happens is the the stock will drop $15 on the ex-dividend day, March 10.   Now it would probably resume its normal trend again from that point forward.  So yes you will get the $15 div, but your stock will be worth $15 less.  Net zero at least in the short term.  Also that will be a realized div for tax purposes and not a capital gain.

Now maybe you're thinking I should short the stock as I pretty well know it will drop $15 on March 10 (ex-dividend), yes you would make $15 on the short but you will now be liable for paying the $15 dividend, net zero in the short term again.

JMHO, as to how these things usually work out in the short term

happy trading / investing
Quasi

Quote from: Quasi on February 21, 2007, 06:42:13 PM

Quote from: nutsterrt on February 21, 2007, 06:20:08 PM
This doesn't make the least bit of sense to me...are you telling me that if you hold the stock through close on March 9th, you'll get $15/share a couple of weeks later, and imminent collapse of the stock price on March 12th?

Sounds too good to be true, doesn't it.  I know when I first started investing I thought the same thing, how could they do that and announce it in advance.

Well after seeing many many of these, what usually happens is the the stock will drop $15 on the ex-dividend day, March 10.   Now it would probably resume its normal trend again from that point forward.  So yes you will get the $15 div, but your stock will be worth $15 less.  Net zero at least in the short term.  Also that will be a realized div for tax purposes and not a capital gain.

Now maybe you're thinking I should short the stock as I pretty well know it will drop $15 on March 10 (ex-dividend), yes you would make $15 on the short but you will now be liable for paying the $15 dividend, net zero in the short term again.

JMHO, as to how these things usually work out in the short term

happy trading / investing
Quasi

I wouldnt enter the stock now that it shot up over 10% from where it was yesterday. I think it was a good buy in the 38s-39s, its very wierd they are doing this divy... I dont know all the info on it but one thing for sure is it will cause a massive short covering because shorts dont want to payout a divy even though the PPS will drop afterwords. 7.7% of the entire float is short so this short squeeze can be intense and run upto the high 40s maybe before its done. Earnings also beat streets estimates by a good amoun.

Quote from: nullzero on February 21, 2007, 06:45:54 PM

I wouldnt enter the stock now that it shot up over 10% from where it was yesterday. I think it was a good buy in the 38s-39s, its very wierd they are doing this divy...

Agree not sure why they are doing the div thing.  I know in the old days some of the tobacco companies used to do that once in a while just to get rid of some profits back the the holders, mostly the owners..

Also I used to own an oil company Hurricane Hydrocarbons (PetroKazakstan), and they paid out about a 40% div one time.  They did it because they were in a hostile takeover and needed to move some cash as the hostile guy was basically going to use their own cash to buy the company.

Not sure what the reasoning is for GMR.

Quasi

Hi all

Interesting action today, no follow thru from yesterday just a sell off down to gap support at $42.50 then spent much time just below that and closed just below at $42.46

I went back and read most of the financial year end press release, and I'm still a little confused.  I like the sector and the fact that they are upgrading ships.  But not sure what to read into some parts of the fundamentals which are deteriorating, (net income, revs....).  And while some people really go for the dividends, I prefer the capital gains.  Now I don't, mind a monthly div on say an income trust, its maybe 10+% per year and the rest is still locked up in the stock as capital gains.

Maybe for me it's a little different with the tax laws in Canada, but I have to pay a higher tax rate on the Div's, than I do on the capital gains.  And in this case I fully expect the stock to drop pretty much $15 when it goes ex-div, so I would be forced to realize about 30% of my investment and would be taxed at the div rate rather than the lower capital gain rate.  You don't have much option a tax event is gonna be triggered whether you hold (div)or sell (cap gain), I wouldn't like that if I owned the stock.

Anyway I didn't like the div idea, so yesterday I looked at put options, thinking that the $40 puts would be in the money after the div payout and stock price dropped.  Now I knew with my limited options experience that options aren't affected as far as the div, not like if you had shorted the stock.  ** However a little after hours reading yesterday and I learned that I was correct as long as the div was normal and expected and less than 10% of the stock price.  In this case its more than 10% and was not expected, so its pretty well a given those $40 May puts I bought yesterday will be adjusted to $25 puts on ex-div day.  Of course I fully expect the stock price to also be down $15.

Now I did buy the puts late morning when the big run up seemed to be reversing, so the put costs had bottomed and were just starting to rise.  In at 0.90 yesterday and todays range was 0.70-1.45 with close at 1.25,  was tempted to sell but am still holding.  I'm willing to wait and see if this gap support at $42.50 range is gonna hold.   If it doesn't hold SP will be back down to $40 pretty quickly. 

Time will tell and with the May puts there won't be any time erosion in the short term.

JMHO and some alternate ideas,  happy trading / investing

Quasi

Well I'm still holding the GMR puts.  For the first day the gap support seemed to be holding but started to fail during the second day and has now fully entered the gap area.  I expect the gap to fill and with the action today I'm wishing I had put on a few more puts in other areas.

The GMR May 40's were as high as $2.05 today and closed at $1.50, so I'm still holding unless we get a close above the gap.

I think alot of people were starting to think this $15 div doesn't really buy em much in the short term.  Now I still like what the company is doing in the long term, I just don't think now is the right entry on the long side.

JMHO

happy investing / trading
Quasi

Hi all,

Quick update on that GMR options play I had going a while ago.  Well GMR stock went ex div at the open this morning and as predicted the stock opened down $15.  So all the long holders now have a $15 taxable div and a stock worth $15 less,  chart is shown below.  Note if you pull up a chart with a few indicators on it you will also notice that everything is screwed up, and it will be for some time as charts are not usually adjusted to div like they are for splits etc.



Now as for those GMR May 40 puts I had, well I didn't want to hold them ex div as I wasn't really sure how this was going to play out.  So I sold them on Friday, it was a little tricky as half the trade volume in that option on Fri was me, but did manage to sell them all.  Got back my money and commissions and about enough for a couple of bottles of nice wine.  Sold Friday at $1.00 and today they became $25 puts trading in the $.25 range..




Now for the options data, again like the charts it's all screwed up due to this adjustment.  Per the CBOE and the OCC the way it was handled was to adjust the strike prices as of the open today.  Thus when you first look at the option chains some people really made some money here.  But just as with stock price charts you have to do a little research to find out what is really going on.  The first paste shows how the option strikes were changed, so my $40 puts became $25 puts, along with all the other puts and calls being changed by $15.  Now the big problem is most of these options were already in the option chain databases, so there were existing previous closes and open interests. But this data is all screwed up, so be careful how you interpret what you see, some examples shown below.





Interesting experience and I've learned a lot about this whole dividend and option adjustment process.

Quasi