Douglas E. Johnston
Long/short equity, hedge fund manager

SandRidge Permian Trust: A 10% Permanent Yielder?

There is good news and bad news on SandRidge Permian Trust (NYSE:PER). First the bad news. The distributions are likely to be significantly lower than originally advertised on this royalty trust. This was hinted at last quarter when the distribution was 2.75% below target (-1.7c). While this may not sound like much, we expect, based on information from their recent 10-K information, that distribution disappointment will begin to grow more dramatically over time. The good news, however, is this appears to be already baked into the price at around $14 a share and that a 10% internal rate of return (IRR) or "yield" is seemingly in the cards. In addition, one might deem this a real yield since...

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