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Oxford Resource Partners (OXF -30.1%) plunges in the wake of Monday's news of a reduced Q3 cash...

Oxford Resource Partners (OXF -30.1%) plunges in the wake of Monday's news of a reduced Q3 cash distribution of $0.20/common unit. OXF had expected to receive $10M-$15M in proceeds from the sale of excess equipment from its Illinois Basin operations but determines it is not likely to obtain acceptable value for the assets by the end of 2012.
Comments (8)
  • taemwar
    , contributor
    Comments (174) | Send Message
     
    I have a small amount of OXF. The dividend yield is over 20% so I'm not going to dump it. Even if the price drops 50% I will hang in there since my investment is too small to make me worry.

     

    For the most part, I buy small amounts of a lot of stocks rather than putting all my eggs in one basket.
    31 Oct 2012, 11:33 AM Reply Like
  • bigg al
    , contributor
    Comments (18) | Send Message
     
    Disappointing news to be honest. Especially when OXF earlier in the year issued a statement the .4375 dividend was safe for all of 2012.
    31 Oct 2012, 11:45 AM Reply Like
  • SaltyDog62
    , contributor
    Comments (698) | Send Message
     
    It was a buying opportunity for me. tripled my investment. I read on their website that dividend reduction is temporary and that OXF "plans" to distribute the other half of dividend at a later date, and make it accumulative, so if they are correct, I will not lose the other .2375 cents. We will see, but I am also betting Romney wins and bring back the coal industry that Obama is trying to destroy. Time will tell i suppose.
    31 Oct 2012, 02:04 PM Reply Like
  • SaltyDog62
    , contributor
    Comments (698) | Send Message
     
    I took the liberty to copy and paste an important part of OXF's announcement. Those holding common shares (like me) will get the full dividend at a later date.

     

    "The Board will continue to review the appropriate level of distributions on a quarter-by-quarter basis and its decisions will be made based on the best information available at the time and the best interest of the Partnership and its unitholders. Under the Partnership's partnership agreement, arrearage amounts resulting from the reduction in the common units distribution accumulate, while those from the subordinated units suspension do not. Accumulated arrearage amounts for the common unitholders will be paid as a priority over and before any future quarterly distributions are paid on the common and subordinated units."

     

    So if they are telling the truth, and events unfold as expected, the market way overreacted today. This is why I tripled my investment today. Still a small holding of mine (1500 shares), but the potential gain is awesome.
    31 Oct 2012, 03:12 PM Reply Like
  • bigg al
    , contributor
    Comments (18) | Send Message
     
    Market always over-reacts and creates opportunities for folks. I think you were smart in your buy. G luck.
    1 Nov 2012, 09:27 AM Reply Like
  • SaltyDog62
    , contributor
    Comments (698) | Send Message
     
    Thanks bigg al,

     

    Now if Romney wins this investment of OXF and RNO will really pay off.
    1 Nov 2012, 09:58 AM Reply Like
  • taemwar
    , contributor
    Comments (174) | Send Message
     
    Rather than buy a lot of shares in OXF, I've bought a few shrares in BPT, CHKR, MVO, SDR, VOC, WHX and WHZ. I'm considering buying 100 or 200 shares of PER.

     

    At some point they will all potentially return all of your capital plus significant income. The downside risks are declining production and declining prices for production. The upside is the possibility of higher than expected production or rising prices.

     

    If the purchasing power of the dollar continues to decline, then these investments could also serve as a hedge against inflation.
    3 Nov 2012, 10:45 AM Reply Like
  • taemwar
    , contributor
    Comments (174) | Send Message
     
    When I bought it, I thought OXF was a royalty trust rather than a MLP and would not potentially create UBTI in my IRA.

     

    So far, I've had mostly negative UBTI in the MLPs in my IRA, but there is a risk--if you get over $1000 in UBTI (Line 20V of the K-1) an IRA must pay tax on it.

     

    I believe the IRA custodian files Form 990-T, pays the tax and deducts it from your IRA.
    6 Nov 2012, 08:07 AM Reply Like
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