- CRF holds a broad portfolio of US stocks and pays a 13.61% distribution.
- It's historically traded at a NAV premium. In the last few months, the premium has risen to over 30%.
- CRF's track record is good, but not good enough to justify the massive premium.
- An upcoming rights offering is an arbitrage opportunity for current holders of the stock, but will likely lead to massive selling pressure. Ironically rights offerings are necessary to sustain the distribution.
- Overall, the large premium is unsustainable.
For further details see:
CRF: Good Performance But Absurd Premium