Spark Energy Preferred Moves Nicely Higher

We wrote a number of times recently about our frustration with the sell-off in Spark Energy 8.75% preferred (NSADAQ:SPKEP) given what we considered to be a fairly solid preferred stock.

After announcing stellar earnings and hiring Morgan Stanley to explore options the shares have moved very nicely higher by near $2/share in the last 10 days.

It is our opinion (and just our opinion) that these shares which are now at $24.80 could move all the way to $26 in the month ahead.  This is based almost entirely off where the shares were trading prior to the announcement of a follow on offering of 2 million preferred shares.  Shares had traded above $27 prior to the announcement and while we don’t think the price will get back to $27 we do see more upside from the current levels.

We have more than enough of this issue in portfolios and thus won’t buy more even with the potential upside.

4 thoughts on “Spark Energy Preferred Moves Nicely Higher”

  1. Question on the article you wrote about how “this trade hasn’t really gone “bad””. It was over on the other website.

    You stated that you made on purchase for 24.57 and then another for 23.32, yet the price of 24.42 on March 8th was .80 a share below your average buy price. I would show the buy price average to be 23.95, so I’m confused. Did you buy more lots than you mentioned in the article?

    If you’re thinking that the pfd’s can trade back to 27.00, now seems like a good time to pick up some. I went over the financials of SPKE and they seem rather decent. They’re making a lot of acquisitions and their income is certainly growing from these accretive acquisitions.

  2. Thanks, Tim. I picked up a small lot of these for $24.62 today, so that seems like a fair entry price. Will be watching to see how they hold up with the Fed announcing the rate hike very soon.

  3. HI GW—I checked it out and I have no idea where I got those numbers–I corrected them on that article. I have this website and then the site and 2 other businesses to watch after and likely just zoned out.

    I bought 600 shares at $24.57 and then 200 shares at 23.32 (should have done it the other way around) for an average cost of $24.26.

    This is much larger than my normal position size and I will look to pare it back a bit at $25.

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