HCLP Cliff --I can't PM and I'm sure have already taxed the Board's interest in UBTI and IRA's so this is last post. UBTI was originally created to tax 501(c)(3)s for generating income unrelated to their tax exempt purpose (eg IRS went after income from gift shops and restaurants at tax exempt museums). It was then expanded to cover other income including apparently MLP income to IRAs.I'm imagining the IRS couldn't stomach no tax at either the MLP or the IRA unit-holder level, so got a law passed to impose one.

HCLP IRA UBTI Cliff--Wow, below is what I got back from IR regarding UBTI. It's actually a huge issue much more serious than I thought. ALL of your pro rata share of income (independent of distributions) is subject to UBTI over the $1000 exemption. If HCLP earns $2 per share annually (for sake of example) then owning over 500 shares would throw you over the exemption if you held it for the full one year period and got your full pro rata allocation of that income. Unless you fall under the exemption, it's hard to see how it makes sense to hold an MLP in your IRA. Cliff, thank you for bringing this issue to light.

Response from IR:

In summary, all MLP income allocable to a charitable institution or a tax-deferred vehicle like IRAs is Unrelated Business Taxable Income (UBTI). UBTI is a concept for tax exempt organizations such as charities, but extends to IRA and other tax deferred vehicles. So the "unrelated" is with a view to a charitable organization and does not have a direct correlation to a retirement account.

That said, all of the income from HCLP is UBTI as the income from the partnership is unrelated to the business purpose of the IRA. It is reported on the Schedule K-1 provided to the investor each year.

For more detail, all taxable income (and UBTI) allocations are individualized based upon the unique investors. Factors include (i) date of purchase, (ii) price at purchase, (iii) date of sale, and (iv) operations of the partnership during the ownership period. There is no way to state a general amount of UBTI for partners, other than to say all the taxable income allocated on a K-1 is expected to be UBTI.

There is a $1,000 de minimus rule and therefore the entire IRA must be analyzed to determine actual tax liability. How much would be taxable to an IRA depends on the factors described above and other holdings in the IRA. One cannot look to an investment HCLP alone.

Hope this helps,
Marc

Per my previous posts I think Red Oak must be working on a sale because they're neither trying to promote the stock price nor energize the company's operations. I agree that a sale seems to be the only endgame for them. Their interests are aligned with all shareholders in working to get the best price. Nonetheless, they may not want to communicate anything that might push up the share price before a firm transaction is announced. The bigger the delta between the agreed sale share price and the share price just before announcement, the better the deal looks which lessens the potential for shareholder lawsuits. We know CCEL was interested and buying shares in the open market at more than 2x Red Oak's cost. We know the $2.5 million in annual recurring revenue is valuable. It's perplexing why a sale is taking so long. Maybe one or more transactions have fallen through? Maybe there's only one buyer left and the negotiations have reached an impasse? Eventually they will have to either announce a transaction or provide an update. It's understandable they don't want to disclose a deal is pending as that could give a buyer more leverage in negotiations. I don't believe Red Oak is just sitting on their hands with no exit in sight.

DEST--Sold half of my remaining position so now only 25% of original shares. Keeps going up but hard to value. Should probably sell it all but enjoying the ride.

HCLP--A little disconcerting that stock under selling pressure before Oct 31 earnings announcement. Does the "inside" money know something? It could just be consolidation from run up since mid August. I have limit order pending to buy more at 9.50 which wasn't hit even though that was low of day.

AMS finally starting to perk up. Good news coming or just a rising tide carrying all ships?

HCLP IRA UBTI Cliff, I emailed HCLP IR and will post any reply re UBTI estimates. One thing I remember from a prior tax year when I had some UBTI generated by a partnership investment, the GP sent me a form to fill out where I had to undertake either that (i) I had aggregate UBTI from all investments of less than $1000 or (ii) I had more than $1000 and would report on my tax return. I believe the IRS regulations required them to get that undertaking from me.

K-1 in IRA and UBTI--True Cliff although very hard to generate $1000 in UBTI from single investment and don't think IRS has mechanism for aggregating UBTI from multiple trades. Of course, it could surface if you were thoroughly audited.

HCLP and other stocks with K-1s--If you invest through an IRA account, I think you can ignore any K-1s received as you're only taxed on IRA distributions.

DEST--Sold half of my small position for 100+% gain in 5 weeks. Hard to value but think it could go higher. New interim CEO serious about cost cutting and balance sheet is manageable. $30 million market cap still seems low for market segment leader with almost $400 million in annual sales.

CCEL reported a strong Q yesterday after market close

POLA--Thanks Skillz. That's very helpful and I really appreciate it.

POLA--Backsliding after spike last week on bullish PR. Skillz, recognizing POLA probably isn't on your shortlist given hard to predict revenues and earnings, what does the TA look like after this pullback?

POLA--While the initial order of 57 generators to Puerto Rico doesn't really move the needle, the PR is encouraging because:

--it confirms a new Tier 1 wireless customer in addition to Verizon
--As 1300 cellular sites are down in Puerto Rico there should be potential for waaaaay more than 57 generators
--at the end of the PR they indicate receiving other hurricane related RFP's for the prospect of additional orders.

While increases in revenues and backlog ultimately will be the bottom line drivers of the share price, the hurricanes served to jump start and accelerate POLA's sales to new customers which had stalled out. If they can execute well and build on these new relationships, it will put them back on a growth path.

Without looking past all of the misery caused by the hurricanes, they have ended up helping POLA. The best time to sell backup generators is after massive power outages.

APWC--Annual meeting is in two weeks. Even though their parent owns 75% of their stock, some vocal SHs pressured them into establishing a dividend policy which provides for an annual dividend of excess cash flow but essentially still at the discretion of the Board. They had a good year in 2016 and audited financials have been finalized. There's no evident reason why they shouldn't declare some dividend for 2016, and they may want to do so prior to the Oct 20 annual meeting or risk getting an earful from unhappy SHs. If they do, it probably will be a modest amount given the history so probably won't move the share price much.

POLA--Surging today on twice average volume. Two hurricanes can only help stimulate their generator sales to corporate buyers. Revenues and backlog this just ended Q should be much improved when reported in November.

SVVC--I bought some at 8.01 even though it seems like a liquidity trap. It reminds me of APWC with a huge NAV/SP gap and where management has dithered for years and done nothing to either effectively promote the SP or get cash back to SHs.

PCMI--Sold half my position (which was over weighted because I kept averaging down) at my average cost of 13.40. Plan to be more patient with the rest as still seems cheap albeit not without risk.

DEST--Volume staying high and price running since my first post a week ago.

NROM--I sold mine also for a modest gain. While they seem to steadily be executing on their expansion plans, it will take time and not drive explosive growth IMO. Any hiccup in execution (e.g. a location that doesn't draw traffic) will set them back for several quarters. Maybe a good long term hold, but probably sideways from here for a few quarters.

DEST--Here's a beaten down retailer with too many stores and a sketchy balance sheet. They could slide into bankruptcy, but if they can rationalize their store footprint and continue to grow online sales, it could bounce back big. Notice the high volume today.

Nelson--I lost money on my UVE trade too. I don't feel stupid for selling--just for initiating the trade in the first place. ??

POLA--I was thinking commercial users might get more focused on contingency generators because of these hurricanes.

POLA--Maybe all this hurricane activity will be good for generator sales?

UVE--Haha, now that I'm out it starts to run even with a "direct hit" forecast. Somebody must be crunching numbers on their maximum exposure after reinsurance which is way above my pay grade.

UVE--Out of the rest of my position at 16.25--lost about 2% on that trade.

UVE--Sold 75% of my position for a slight loss at 16.45. I had gotten waaaaay over my skis so am glad it rallied some end of day.

I still think the recurring revenue stream is significantly more valuable than the current market cap especially to buyer that can reduce expenses by integrating into its existing operations. I don't think either CCEL or Red Oak were attracted by the prospect of growing the business, and Red Oak has done nothing to indicate they're trying to grow the business. They got in cheap, have carefully managed expenses and put the business up for sale. Although stranger things have happened, it makes no sense to me that Red Oak is planning to just hold indefinitely or that no buyer would emerge at a price that would be approximately 3X of what Red Oak paid. We know CCEL was buying shares at much higher than the current price, so they must think it's worth more. I still think there will be a transaction by year end. Otherwise, Red Oak is just holding a company that's in operational limbo--financially stable but not growing.

UVE--I hope your wrong bbotcs because I have kept averaging down to 16.62 into a now very full position. I'm not buying more.

UVE--Now averaged down to 17.40. Just another boring dividend play..

UVE--In at 17.93 on a bet that Irma won't slam Florida, and UVE will bounce back. FYI, the bet isn't based on any meteorology.

POLA--Getting slammed. Doesn't bode well for earnings next week. Makes the decision to hold into earnings easier.

Thanks otc. Just what is was looking for.

Can anyone provide link where you can enter a company symbol, and it shows all of the 13F shareholder filings?

POLA-- Thanks for posting that blog reco Hweb which must have been the catalyst for Friday's surge. Doesn't seem strange that they would give a no name blogger news of contract signings with ATT and Sprint but not otherwise communicate that to the market after their stock has been absolutely pummeled because of the customer concentration issue? Also, as the contract with Verizon shows, a contract doesn't necessarily translate into a near term sales ramp--more like you've been cleared as an approved vendor. Still it's an important and necessary first step with potentially huge customers. It will be interesting to see whether the backlog and associated commentary in the Q2 report will be encouraging enough to overcome the poor expected Q2 results.

POLA--Up big today on huge volume with no news I can find. Maybe some orchestrated pump? Maybe just me buying to boost my PSL standings?

POLA--I'm thinking even if results are poor, could trade up if backlog improves.

POLA--A steady recovery since big revenue miss. No contact announcements I'm aware of, but buyers pushing up the share price must be optimistic about next Q report in early August. If it runs past 6 before then, it will be tempting to sell at least half before the release as it will be a coin toss without any prior guidance.

Seemed very weird earlier when both the VIX and Treasury yields were up strongly as they usually move in opposite directions. Any theories?

CNAT-R59 Assuming the market doesn't tank, do you have a price target through year end?