February 1, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of SandRidge Mississippian Trust II (NYSE: SDR ) fell 13% today, after the company declared distributions.
So what: The company will pay $0.533 per unit by March 1 to shareholders of record on Feb. 14. This is down from $0.599 last quarter. Raymond James analyst Kevin Smith expected a distribution of $0.71, so he lowered the company's rating from outperform to underperform.
Now what: Investors own these trusts for the distributions, so when the company lowers them, the stock often falls. The other downside is that operationally, sales volumes fell 7% in the quarter, so operations aren't headed in the right direction. I don't think there are any catalysts short-term for the stock, and I'd wait to see an improvement in operations before jumping in.
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