Gne Preferred Start Trading

Gne Preferred (GNEPA) started trading today. As expected, the volume is really low. As of 12pm EST, there has been 1750 shares traded and the stock is $7.89. It is trading at around a 8% yield. Investors who exchanged the common shares are making a profit at the current price. The common was around $7.30 when the shares were exchanged one for one.

The dividend should be safe since GNE has plenty of cash and only 1.6 million shares are outstanding. GNE will only have to shelve out $1 million yearly on dividend payments. I expect the preferred to trade in the $7-$8 range. 

Read our article on GNE here.

Disclosure: I do not own shares of GNE.

Dean Foods Spin-off

Dean Foods (DF) announced its WhiteWave-Alpro division has filed to spin-off into a separate company called WhiteWave. The IPO is expected to raise up to $320 million by selling 20 million Class A shares at about $14 to $16 each. Dean will still own 150 million Class B shares after the spin-off.

Dean is spinning-off WhiteWave to unlock the value of the company. WhiteWave has experienced strong growth over the last 5 years, but it has been hidden underneath Dean. WhiteWave makes Silk soy milk, Land O’Lakes and Horizon Organic.

I did a quick read of the filing, and it seems like Dean is undervalued even though it is up 13% today. 

I have initiated a position at $16.97, but will do more due diligence today and break down the analysis tomorrow.

Disclosure: I am long Dean Foods (DF)