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Gabelli Utility Trust Preferred Ripe for a Call

I was reviewing the large volume issues from today (large compared to normal daily volume) and I noticed an old friend of mine in the list–Gabelli Utility Trust 5.625% preferred (GUT-A) had traded just 8,700 shares–but that is 7 times normal volume.

It wasn’t really the volume that caught my eye–it was the ridiculous share price that stood out—$27.81 and optionally redeemable since 2008. I think investors are just daring Mario Gabelli to spank them with a 10% loss.

With the call of the Gabelli Dividend and Income preferred (GDV-A) on Monday you would think they maybe would be keeping their eye on other potential calls–especially because they could replace called issues with sub 5% new preferreds if they desired.

I mentioned this as being an ‘old friend’ as I held it for many years – even after it was redeemable–but I guarantee you it was never this far out of line in price.

Gabelli has always been kind of slow to call issues, but it is becoming more difficult for a fund manager to explain to common holders that it makes sense to line the pockets of preferred holders at the expense of the common people.

I am watching for a call here.

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