1} PRL beats the numbers and is either flat or a modest rise . GSY does the same .
2} PRL doesn't beat the numbers and drags GSY down with it . As both are in the dog house I'm thinking a lot .....
3} GSY once dropping below $100 drops like a stone ....
From a risk reward point of view please critique my reasoning and if it might be prudent to get out of Dodge before March 2nd ?
Thanks for your terrific service ......
While they are of course similar, with both already down a lot we are not sure they will stay closely correlated. PRL could decline and bring GSY down in the short term. But earnings will dictate how each goes individually. PRL recently raised its dividend, which is usually (not always) a good sign. Investors at both companies are not expecting much and valuations are already very low. We doubt GSY reacts too much to PRL, unless PRL is a complete disaster (possible, but we see unlikely). On point #3, we would not put any significance to a $100 share price on GSY. If it breaches this is does not mean it has to fall further just for a random price point. We do not like 'guessing' on quarters. An investor needs to call both the quarter and the market reaction. Sometimes, bad news can move a stock up, if it is not as bad as feared. We would be fine holding GSY at 6.5% earnings and a 5.44% yield. This is not its first crisis, nor drawdown. We would though monitor position size. We cannot comment on personal weightings, but for a small cap stock with weak momentum and high sensitivity to rates and the economy, WE would consider 4.25% fairly aggressive. Our growth portfolio position was 3.06% at month-end. Also, if one holds a stock, we assume it is for its potential. Thus, a 4.25% position could easily become 5%+ in a short period.