In the wake of Hoegh LNG Partners dividend cut

I almost pulled the trigger on selling off my holdings in Hoegh LNG Partners until my cooler head prevailed. Let’s hope I made the right decision. After the announcement of their 98% dividend cut investors were dumping their shares and the stock price opened today at $7.05 down from $17.87 at the close yesterday. That’s about a 60% drop in share price. That combined with the dividend cut I was left with a decision to cut and run and take the loss or hold and see what happens in the coming months.

I chose to hold. The stock right now is near it’s 52 week low and near it’s all time low. I’m predicting the company will improve its balance sheet and fix its operations which should result in a recovery in the price of the stock and hopefully a restoration of the dividend. We’ll see. It’s bit of a gamble but with the steep drop I didn’t want to make the mistake of pulling out and selling at it’s low. I am still new at this and have the ability to absorb the loss and learn from it.

What I have done is re-evaluated my High Yield portfolio to remove a lot of the risk. I was definitely being too aggressive with the yield returns and now I believe I know my limitations on risk tolerance. In a separate post I’ll list the positions I sold, the ones I held, and the new positions I added. My annual income will take a hit but I need something more inline with my risk tolerance.