Jonathan Wolfe

Jonathan Wolfe
Contributor since: 2012
Company: Dividend Income Stocks
I had a large amount of VGR, but I got out at just under 21 a share. For a stock that sat from 16-18 for several years, I'm not comfortable at 21. It does appear that some people just discovered this stock and the new interest has increased the price.
Thanks for your comment - This article was written over 2 years ago, and actually Pepco did not even hit the earnings figures that I had projected for 2012 and 2013. Before the Exelon sales announcement, the stock was $21.40, On March 6, 2012, the stock was at $19.60. They have continued to dilute their stock (up to 250 million shares now, which I believe has hurt the EPS).
I feel for investors such as rgperrin above that spent over 20 a share - 25 years ago!
The payout ratio of greater than 100% is only temporary. Future earnings put the payout ratio back in the 70% range, a little high, but not unsustainable.
Thanks for your comment Mark. I didn't really even think about the 2016 elections, but that definitely will add uncertainity.
In a market of stocks at 52 week highs, I believe these utilities are a very solid value to park some money.
Yes, I thought it was a bit amazing too, thats why I wrote the article. The downgrades I thought were unnecessary.
I can explain why prices went up for June 2014 - the thought was that many coal plants were going to be decommissioned due to EPA rules. The thought was a lack of generation. Now you are seeing uprates at several plants along with natural gas turbines popping up as baseload resources, so I believe that explains the drop now. These auctions are very far in advance and you have to think about what was going on 2, 3 or even 5 to 7 years ago to make sense of it today.
I'm probably in tomorrow as well. I was on the road and didn't watch the market at all today.
I'm a little concerned about the 400 million bushels of corn that were "found", but I believe fertilizer will still be quite strong.
Maybe we can write a Ying Yang twins article. I'll ponder that one.
Thanks Chris - just signed up for your newsletter. Makes me sad that many good writers are leaving SA - hopefully you have all left for greener pastures.
Nice to see you pop back up Chris. You have been a stranger to any articles about the fertilizer stocks lately.
Sorry to hear you bought in at $46. I guess someone is buying at the top. Probably a good dollar cost average opportunity around $32 a share. No interest in UAN?
While it is true that RNF does use Natural Gas as their feedstock, I don't believe that is what has driven down the price, or you would see a similar type crash for Terra Nitrogen TNH. This is more due to RNF predicting reduced distributions for 2013 due to maintenance outages, and increased earnings from UAN due to not having an outage this year.
Also please correct UAH to UAN in your article at the bottom.
Let me make an additional comment on top of that. Usually when you start to see a price tumble for corn, you look at some food producers, K, GIS, CAG - but they are all close to 52 week highs. MDLZ might be the only potential buy in that sector - very tough to figure in a market that I feel most stocks are a bit overvalued currently.
Burt - you are right, a bit stunning on inventory levels. Where did we "lose" 400 million bushels?
I believe we are safe for 2013, as most fertilizer orders are in - but it does bring up a good question for 2014. RNF can produce more DEF and reduce some supply in that fashion. I'm staying on the sidelines for now, hoping to see a reduction in prices from both of these stocks.
Thanks for the comment Darren. The issue is storage and pipelines for the natural gas currently. That may be more of an issue for pricing in the near term. Pet Coke will be a fixed cost.
I'm bullish about the products - but they need to improve their marketing and advertisement. This phone is a true unknown to the majority of consumers.
Here is an SA article speaking of the dividend cut of Exelons.
They went from $2.10 per year to $1.24. I would have loved this article to talk more about why EXC had to cut their dividend.
Where are the numbers for Exelon? You also fail to mention what the expenditures are.
There is currently a lot of government assistance (money) for upgrades to infrastructure. These improvements will pay off big time as the years continue.
Thanks for the additional info. A better price than their 4th quarter average, but not quite what RNF got. I'll see if I can dig up any additional information on UAN sales.
JDHD - thanks for stopping by to read another one of my articles. I like your approach, though I feel like possibly staggering your entry/exit points could be a boost. Another down day or two for RNF, and my argument is void though.
I agree - these are somewhat high beta stocks (especially RNF lately), and investors should have an idea of an exit price and an entry price. A bumper crop of corn could make these stocks fall like Terra Nitrogen did in 2008 and 2010.
I believe $2.60 is probably a conservative figure based on how they projected in 2012, and current prices. May corn now at $7.30, and not looking back. Like I stated above, I wouldn't sell RNF if I held it currently, but I'd wait for an even lower entry point. UAN is undervalued comparatively for 2013 earnings/distributions.
Thanks for the comment bowling ball - Read my reply above to pcship. I believe 2014 will be RNF's year, they have a very bright future. The better value today in my mind is UAN.
I would not sell RNF currently if I held it, but at todays prices, UAN I believe is the better value. If RNF drops to 30 a share, then its a wash.
My belief is that UAN will pay out $2.35-2.40 a share for 2013, and RNF will be in the $2.60-2.75 per share range.
RNF will be the strong horse for 2014, but I believe there will be affordable entry points 8-12 months from now.
You are correct inspector, and I submitted a correction. Thanks again - sometimes you get tunnel vision writing this articles.
One note here - if the company declares bankruptcy, the put is worthless. I had this happen with $GMR
Thanks JDHD - hoping for Sequester Friday or maybe a Black Monday to come to get a purchase. It does upset me with the haphazard upgrades/downgrades.
Appears that UAN is up in after hours trading. Guess the public is happy with 2013 projections.
A bit late here to comment, but I expected a number close to their payout (19.2 cents), and they hit 21 cents. I saw they are predicting $2.15-$2.45 a share, and I stated in the article, $2.25-2.35.
Maybe the general (and big) investors are smarter than before, with RNF going up as well as UAN today. Personally was hoping for a bit more pullback.
They were inspired by something, maybe the "foolish" downgrade! I only wish I could take credit for that.
I like that the Monley Fool published a very similar article to mine about 2 hours after mine was published:
Thanks - I follow them for buying opportunities. Dahlman Rose has made me a lot of money in RNF, but as I said, doing the opposite of what they say.
I don't believe the farmers would leave this land empty though. As I mentioned above, crop insurance at $5.60 per bushel should be incentive enough to plant.