Wrong Trust Wrong Business

Jun 12th, 2009 – Comment

The Investment Reporter as well as the BUY and SELL advisory gave this a buy rating when the unit price was trading at $5.67  (This is much after the div. was reduced in May)Since then it has fallen to $5.15 and has been staying around $5.20. There was some unusual trading today when it hit […]


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The Investment Reporter as well as the BUY and SELL advisory gave this a buy rating when the unit price was trading at $5.67  (This is much after the div. was reduced in May)Since then it has fallen to $5.15 and has been staying around $5.20.

There was some unusual trading today when it hit $5.28 today after the usual decline to $5.15 the past 3 trading days.

However the closing was still under $5.28.  The company is expected to announce div for June.  In May they had reduced their dividend.

Yesterday the company had announced purchase of several millions of their series 1 and 2 preferred shares. Ratings and targets have varied.

What is your take on this trust ?

Nazir

Hi Nazir,

The business sector  for the Yellow Pages Income Fund is under pressure as well as every form of  advertising. What happens in a recession is that consumers of advertising start to review where their money is being spent. In addition the the phone book as we have come to know and love it is losing ground to the expanding power of the internet.

I can’t recall the last time I pulled out what used to be a trusted referrence for services. I even used to use the yellow pages for competitive analysis. yloEveryone in a segment was in the book and you could size up who was in the space and how to attack the market. But that was then this is now.

The long term chart also paints a bleak picture of how the stock has performed over the last three years.

The units are in a range bound trade between $6.25 and $5.25 and has oscillated in the range twice this year. If you took the long trip both times you would have traded for a 40% gain.ylo2

I suppose that when the economy recovers there will be an up tick in sales but it has to break through $6 before it can make that journey.

Happy Capitalism!

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