Author: MPC
Atlas America (ATLS) is a natural gas drilling and pipeline holding company. Per share of ATLS, I believe the parent owns 0.7754 shares of natural gas driller Atlas Energy Resources (ATN), 0.4520 shares of pipeline GP Atlas Pipeline Holdings (AHD), 0.0282 shares of pipeline LP Atlas Pipeline (APL), $2.54 of cash, and $0.40 of a small VC firm at book value. At today’s prices, I believe you can buy the parent and short the ATN portion for even money, i.e. own the rest for free.
Author: ajalper
The A shares are currently trading at a 6% (down from a peak 10%) premium to its historic relative value to the B shares. The premium usually bounces between 0-2%. This is a highly unusual spread for this pair that tends to track very closely. Other smaller spreads in recent past have closed within a day or two. The unusual market conditions and the recent heavy sell off and long-term low of the B shares, may cause it to revert to the mean a bit more slowly, since a rally in the B-shares my be required to close the gap. This is not a large spread in relationship to other opportunities currently in the market, but has a very high probability of reverting to its historic relationship in the short-term. A shares represent 30 times the face value of B shares. A relative arbitrage play of selling 1 A share short and 30 B shares long would return approximately $4500. Obviously, enough capital and margin is necessary to make the initial trade.
I am currently short on the A shares and long on the B shares.
Author: JEllis
The Pimco High Income fund is at a 68% premium to NAV. PHK got to such a crazy premium because Bill Gross talked it up in the Barron’s roundtable (helped by the high dividend). Per Gross’s rountable comments the fund made major changes at the end of the year and is now 60% IG. Gross’s comments might be the best indication of what is in the fund as the most recent filings are 6/30/08. My interpretation of his comments is that there are a lot of financial hybrids in this fund, which may explain why the NAV has done nothing recently even with a nice rally in IG credit . This fund is very levered (assets 2x equity at 6/30).
I took a small short in this a couple weeks ago and see it as a partial offset of my long credit and equity exposure. Share availability might be an issue now, as I tried to add to the short and could not. Gross is smart and generally wouldn’t want to bet against him, but a 68% premium is ridiculous.
http://www.etfconnect.com/select/fundpages/gen.asp?MFID=108698
