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Mesabi Trust Shares Plunged: What You Need to Know

By Travis Hoium - Updated Apr 6, 2017 at 10:26PM

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Is this meaningful? Or just another movement?

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 Mesabi Trust (NYSE: MSB) fell 10% today after the company announced a lower distribution to shareholders.

So what: The company will distribute $0.05 per share -- dramatically lower than the $0.125 it gave shareholders last year. Lower royalty revenues, royalty adjustments from previous quarters, and the elimination of distribution from cash reserves account for the lower payment.

Now what: This is a more sustainable distribution, since it doesn't pull from reserves, but income investors aren't applauding the move. I wouldn't panic over this move today, given that this is traditionally a seasonally low distribution anyway. And for those looking to jump in, today's discount is a nice buying opportunity.

Interested in more info on Mesabi Trust? Add it to your watchlist.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Mesabi Trust Stock Quote
Mesabi Trust
MSB
$23.37 (1.30%) $0.30

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