AIR - Air NZ.

[bonmaklad]

I thought I purchased at an average of 2.05 but I ended up with 2.1. Hence its tempting now to buy more

[Arbroath]

The market was fairly efficient with the re-pricing ex-div tho ? Down 38c on a divvy of 35c so has opened -3 cetabis parabis.
From my understanding this would preclude dividend stripping.

I'm not making any comment on whether a dividend stripping strategy will work here with AIR but usually it requires buying 2-4 weeks before dividend and holding for a few weeks after so if you bought at say $2.25 you've now received the 35c dividend and if the price gets anywhere near $2.25 in the next few weeks you're a winner (this time). The debate of course is that there are a whole range of factors affecting the price apart from the dividend itself over a period of 4-5 weeks but over my investing life (c. 3o years) it happens more often than not - look at Contact in the past 10 days - went ex 15cps and recovered it within a week. People will argue all day long about efficient markets etc but that looks a text book dividend strip to me....

[Bobdn]

Contact recovered in 48 hours

[sb9]

Hv only got one parcel of medium size at 204.5 and that's it, didn't add any more or sold any of that yet and no immediate plans of selling....

[thestg]

Contact recovered in 48 hours

Over the last 4 dividends paid by AIR the average recovery time to the pre-dividend price has been 37.5 days (Close prices used). After an average of 14 days the close price was at its lowest.
Pre Div $2.90 - Ex $2.84 - 5 days later $2.75 - 13 days later $2.90
Pre Div $2.53 - Ex $2.41 - 1 days later $2.35 - 28 days later $2.58
Pre Div $2.97 - Ex $2.88 - 16 days later $2.67 - 37 days later $2.97
Pre Div $2.21 - Ex $2.06 - 34 days later $1.79 - 72 days later $2.23

[Beagle]

Over the last 4 dividends paid by AIR the average recovery time to the pre-dividend price has been 37.5 days (Close prices used). After an average of 14 days the close price was at its lowest.
Pre Div $2.90 - Ex $2.84 - 5 days later $2.75 - 13 days later $2.90
Pre Div $2.53 - Ex $2.41 - 1 days later $2.35 - 28 days later $2.58
Pre Div $2.97 - Ex $2.88 - 16 days later $2.67 - 32 days later $2.97
Pre Div $2.21 - Ex $2.06 - 34 days later $1.79 - 72 days later $2.23

Nice analysis work. That last example where it got down to $1.79 was at the time of great fear of a world-wide Ebola pandemic so one can probably eliminate that from the study as it was a highly unusual event.

[sharp]

There is clearly some solid cost cutting going at, benefitting shareholders but ruining it for passengers. They consistently trumpet that some website has named them Airline of the year three years running and my last 10 international flights have been with Air Nz but i will look elsewhere next time. They market themselves rather well with this premium image but they are barely above Jetstar

Have just been return to Niue in The Works. Food or Drink (free alcohol in The Works) was not available to order for the whole three hour flight on the way over off the entertainment screen. You could only get things when the cart came down the aisle. Halfway through the flight I enquired when it would open and was told shortly. Cost cutting or incompetent staff?

On the return flight they ran out of meals 9 short from the end, so the snack items like Sandwiches and Pies ended up being used for those passengers. I had ordered and paid for a toasted sandwich but this never eventuated before showing up as sold out, you think someone could come explain why? I was only able to get one drink on the trolleys single trip down the aisle and then another when the Food and Drinks was available for ordering for single block of 30 minutes before being shut 1 hour from Auckland.

This is in complete contrast from a Works flight to Sydney last year where Food and Drink were available to order almost immediately and for most of the flight. Either the staff couldn't be bothered or Air Nz has some magical new reasons for this.

Have you raised this with Air NZ?

Did you voice your complaints and issues to the stewardards/esses on the plane?

What were their reactions and attitudes?

When was the last time you flew Jetstar? Have you flown with any other airlines recently?

[allfromacell]

Selling out just before record date or immediately after ex date usually results in sub par short term performance all other factors being equal according to dividend stripping studies I have seen.

Generally those buying ahead of a dividend and holding for several weeks after ex, on average make short term outperformance gains.

Anyway for all fellow dividend hounds the beagle has crunched the numbers for you, (remember the 5% RWT comes off the dividend grossed up for imputation credits so for every share you own assuming you don't have an exemption certificate for RWT you'll get

35 cps / 0.72 = gross dividend 48.6111 cps
Imputation Credits @ 28% 13.6111 cps
Resident Withholding tax at 5% 2.4305 cps
Net Dividend 32.5695 cps

Anyone on a lower tax rate than 33%, (under $70K per annum) will be able to claim back a portion of the RWT and / or Imputation credit when they do their FY17 tax return.

e.g. A taxpayer on a marginal tax rate of 17.5%, (up to $48K per annum) would get a refund per share of (48.6111 x 17.5% = 8.5069 tax - tax deducted 16.04cps) = 7.5331 cps so their net dividend after calculating their tax refund would come to 32.5695 + 7.5331 = 40.1 cps. People on under $48,000 per annum must love N.Z.'s imputation system as they get 5 cents in extra dividend due to the tax credits, how good is that !

Thanks for the post Roger, as a young person on less than 48K I would never have known this otherwise. It seems there is a significant tax incentive for me to invest in shares paying regular imputed dividends. So all I need to do is submit the imputation credits and dividend amount at the end of the year on my personal tax summary?

[see weed]

Over the last 4 dividends paid by AIR the average recovery time to the pre-dividend price has been 37.5 days (Close prices used). After an average of 14 days the close price was at its lowest.
Pre Div $2.90 - Ex $2.84 - 5 days later $2.75 - 13 days later $2.90
Pre Div $2.53 - Ex $2.41 - 1 days later $2.35 - 28 days later $2.58
Pre Div $2.97 - Ex $2.88 - 16 days later $2.67 - 37 days later $2.97
Pre Div $2.21 - Ex $2.06 - 34 days later $1.79 - 72 days later $2.23

That would be after normal div. So if you deduct the 25c special from closing price of 2.41c, then $2.16c will be the recovery price. My recovery price is $2.134c at the moment. So am not too worried at this stage, especially when on the ASB securities AIR detail page saying the cps is 45c and the yld is 21% odd for unsuspecting new comers to the site.

[Beagle]

Thanks for the post Roger, as a young person on less than 48K I would never have known this otherwise. It seems there is a significant tax incentive for me to invest in shares paying regular imputed dividends. So all I need to do is submit the imputation credits and dividend amount at the end of the year on my personal tax summary?

You're welcome mate. I enjoy contributing for the benefit of others and yes you are right anyone on under $48K, marginal tax rate 17.5% can get quite a nice benefit from investing in shares paying full imputation credits at 28%. Just a note of caution though. The IRD gives you a tax credit for all your imputation credits but will not refund imputation credits per se. People need to have some other form of tax credit, RWT deducted, tax paid or PAYE credits which are refundable for the imputation credit to be effectively utilised in the year in which its received otherwise the imputation credit carries forward to future years. Yes just fill out the dividend section of your tax return with all the information contained in your dividend statements and Bob's your Uncle