Stock discussions

[vkk]

14 minutes ago, Konebhar6 said:

I am working on a new project called - Dividend capture. Basically the idea is to buy the stock close to the closing bell on the day before ex-dividend date. Sell it on the ex-dividend date with the idea to recover the capital and get dividend paid later. Move capital to another stock. Rinse and repeat. Tough part is to look at the history of stocks that recover well. 

Unless i have misunderstood the above, stocks i have seen trade more or less lower on ex-dividend date throughout the day, when compared to the day before. Maybe stay with the stock for a day or two until after ex dividend date.

[Konebhar6]

2 minutes ago, vkk said:

Unless i have misunderstood the above, stocks i have seen trade more or less lower on ex-dividend date throughout the day, when compared to the day before. Maybe stay with the stock for a day or two until after ex dividend date.

You are correct on prices going down on ex-dividend date. We can put a trigger for the buy price on the previous day itself. Mostly I have seen the price opens high and goes lower as day goes. 

I have done this analysis on historic recovery dates. Surprisingly a lot of of them recover in 1-3 days. The tough part is to identify the stocks with higher recovery rates and work this out. I am experimenting this. Lets  see how it goes.

[Konebhar6]

46 minutes ago, vkk said:

 

I am taking note of the list. Few similar holdings of mine as below:

HDV  3-4% yield + 17% price appreciation
JEPI 7-8% yield + 12% price appreciation 
MO   8-9% yield + 11% price appreciation
SCHD 3-4% yield + 7%  price appreciation

I will still be booking losses for the next few years because of few bad picks in terms of individual stocks from covid time.

These are good picks. I have HDV and MO too. Planning to buy SCHD. 

One thing to keep in mind when buying these monthly income funds. See how the dividend is distributed. If it is distributed as "Return of capital" consistently, its a concern. IT means they are not making money but just returning back our investment. This is non-taxable (good thing) but if they consistently do this, its not good. Stock price will reduce. 

BST, BSTZ are consistently doing these. I am thinking to get out of them for those reasons. But again price appreciation has been decent. So for now, I am stay put in those.

[vkk]

4 minutes ago, Konebhar6 said:

You are correct on prices going down on ex-dividend date. We can put a trigger for the buy price on the previous day itself. Mostly I have seen the price opens high and goes lower as day goes. 

I have done this analysis on historic recovery dates. Surprisingly a lot of of them recover in 1-3 days. The tough part is to identify the stocks with higher recovery rates and work this out. I am experimenting this. Lets  see how it goes.

Nice. Seems intriguing.

Unrelated to the above, during 2008-09, i would buy these 2 or 3 inverse index etfs, and get in and out every 2 days. Nothing big, but would make small gains 3 or 4 times a week without fail. Then did few big trades on AIG and one more stock, and all those gains gone. Market giveth and taketh

[vkk]

2 minutes ago, Konebhar6 said:

These are good picks. I have HDV and MO too. Planning to buy SCHD. 

One thing to keep in mind when buying these monthly income funds. See how the dividend is distributed. If it is distributed as "Return of capital" consistently, its a concern. IT means they are not making money but just returning back our investment. This is non-taxable (good thing) but if they consistently do this, its not good. Stock price will reduce. 

BST, BSTZ are consistently doing these. I am thinking to get out of them for those reasons. But again price appreciation has been decent. So for now, I am stay put in those.

I have always looked at qualified vs unqualified dividends in terms of their tax treatment. Never explored return of capital aspect. I will check it out.

 

[argadorn]

49 minutes ago, cool_boy said:

asalu intha fraud market lo ela dare chesthunav bro

 

😎 last time elaney invest pichi stocks medha chesha last ki oka pichi stock undhi 80 percent lost … esari ila kadhu ani safe stocks medha peduthuna … adhi kuda pothay .. we had fun ani muskoni potha .. lol 

[Konebhar6]

8 minutes ago, vkk said:

I have always looked at qualified vs unqualified dividends in terms of their tax treatment. Never explored return of capital aspect. I will check it out.

 

Qualified and unqualified - Both are taxed. Qualified is taxed at lower rates between 0 to 20% and Unqualified a bit more. They are reported under 2(a), 2(b).  But return of capital is reported under Section 3. 

[Konebhar6]

10 minutes ago, argadorn said:

😎 last time elaney invest pichi stocks medha chesha last ki oka pichi stock undhi 80 percent lost … esari ila kadhu ani safe stocks medha peduthuna … adhi kuda pothay .. we had fun ani muskoni potha .. lol 

Uncle, Trick is to control emotions and not look at stocks every day when they go down. Do a dollar cost averaging and at some point stop and sit back and let them grow. 

Its easier to say, but difficult to execute. Everyone gets panic or fear when markets go down and start seeing our investments in red. 

[BommaliNinnodhala]

Carvana 

 

paycom 

[megadheera]

Carvana.. wow 1 year back at the edge of bankruptcy and stock went to 3 dollars.. now it is $125..

[VictoryTDP]

1 hour ago, argadorn said:

😎 last time elaney invest pichi stocks medha chesha last ki oka pichi stock undhi 80 percent lost … esari ila kadhu ani safe stocks medha peduthuna … adhi kuda pothay .. we had fun ani muskoni potha .. lol 

CVNA choodu 

[VictoryTDP]

41 minutes ago, megadheera said:

Carvana.. wow 1 year back at the edge of bankruptcy and stock went to 3 dollars.. now it is $125..

Ittanti vatillo asalu oka 5k Padeai unte @argadorn

[Konebhar6]

1 hour ago, megadheera said:

Carvana.. wow 1 year back at the edge of bankruptcy and stock went to 3 dollars.. now it is $125..

For every 1 stock that's successful, there will be more that actually went through with bankruptcy. 

[BommaliNinnodhala]

2 minutes ago, Konebhar6 said:

For every 1 stock that's successful, there will be more that actually went through with bankruptcy. 

GP 

WBA mida ni opinion? Stuck at high 20’s and not moving 

[Konebhar6]

54 minutes ago, BommaliNinnodhala said:

GP 

WBA mida ni opinion? Stuck at high 20’s and not moving 

At this point, it looks like a classic Dividend/Value Stock Trap. 

Positives

• Dividend Aristocrat - Meaning it increased dividends for more than 25 consecutive years. 
• Lowest Price in 26 Yrs.
• Low PE and very low Forward PE ratios. Means there is value in stock.
• Like MMM, GE its Planning to sell Boots (UK Pharmacy Chain), Sheilds Health Solution (Specialty Pharma business) to reduce debt.
• Planning to restore investors confidence in the company and growth. 

Negatives

• Company cut its outlook for this year. 
• High Interest rates is taking a toll on its debt. Very high Debt/Equity ratio of 2.7.
• Reduced consumer spending and IRS seeking to collect $2.7 billion in unpaid taxes.
• Making lower lows. Current price below 7-day, 50-Day, and 200-Day Moving averages.

If dividend is cut like MMM and LEG which are both Dividend Kings (50 consecutive years of Dividend growth), its will go down 20-25%. Look at LEG price today. Stock is down 25% on news that it cut its Dividend. 

Conclusion - Avoid until there is a clear direction from the company. Its a classic Value/Dividend trap. Do not $ Cost Average it down. IT will see lower prices before it goes up. Move your money into another stock. May be NVO, LLY.