TRA - Turners Automotive Group [previously TNR - Turners Limited]

[Snoopy]

Yes, DRP participation can be particularly beneficial when momentum is in favour. Buyers on hand this morning at $4.26 so a good result, and a non-taxable benefit for most holders.

Larger holders can actually sell sufficient shares on-market now to effectively receive an early cash "dividend" and still be ahead once DRP shares are actually allotted (in this case on 27 October).

I am sure that ronaldson has been around long enough to know his stuff. Nevertheless, I think the language and the way the above post is worded is a bit misleading on the taxation status of the DRP. Tax is paid before the net amount is re-invested in the DRP. So I don't think it is correct to say the DRP is providing a non-taxable benefit for any holders.

Yes I know, the qualification that ronaldson gave of 'momentum being in our favour' is a nod to the share price rising once the DRP shares are allotted. IOW what ronaldson is alluding to is a free capital gain on the DRP shares. But if it was the intent of a large holder to sell their DRP shares and cash in on the 'capital gain' from the DRP, then I am sorry to say that such a capital gain would legally be taxable. So contrary to what anyone might think, that means there is no 'free lunch' from the tax man on offer here.

SNOOPY

[Muse]

I am sure that ronaldson has been around long enough to know his stuff. Nevertheless, I think the way the above post is worded is a bit misleading on the taxation status of the DRP. Tax is paid before the net amount is re-invested in the DRP. So I don't think it is correct to say the DRP is providing a non-taxable benefit for any holders.

The qualification that ronaldson gave of 'momentum being in our favour' is a nod to the share price rising once the DRP shares are allotted. IOW what ronaldson is alluding to is a free capital gain on the DRP shares. But if it was the intent of a large holder to sell their DRP shares and cash in on the 'capital gain' from the DRP, then I am sorry to say that such a capital gain would legally be taxable. So contrary to what anyone might think, that means there is no 'free lunch' from the tax man on offer here.

SNOOPY

Aye I was thinking the same thing Snoopy, thanks for mentioning.

The funny, grey world of capital vs. revenue account. A shareholder might own their shares on capital account, but if they elect to receive (and de facto acquire shares) from the DRP because there is momentum behind it and quickly sell them to pocket a capital gain, I wouldn't be surprised at all for the IRD (upon review) to take the view the DRP shares were acquired with the intention of sale for gain, and be enough for them to poke around other historic transactions. just my 2c.

[Rawz]

Gosh the IRD can be harsh. Best I keep all my TRA shares

[777]

Why sell the DRP shares? Just sell some of the ones that gave you the dividend.

[ronaldson]

Why sell the DRP shares? Just sell some of the ones that gave you the dividend.

Correct. I am simply pointing out that if you sell shares after the ex-date you will receive cash (after T+2) before the DRP shares are allotted/vest. So you are definitely not "selling the DRP shares" per se.

And given that the calculation to issue the DRP shares is invariably at a 1%, 2% or 3% discount to a weighted average market price based mostly on five trading days, this can be advantageous. We live in a society where not all "gain" is taxable. You are certainly neither evading nor reducing your tax liability on the dividend (which is likely to have imputation credits/withholding tax attached/accounted which may in turn be more or less than your ultimate individual tax rate ). And your share sale need not match the amount of the dividend but can/should be greater or lesser depending upon your needs.

[bull....]

Insight investor relations advisor James Schofield says he believes that that Turners Automotive Group is knocking on the door of inclusion in the NZX 50 index in December 2023, according to analyses by NZX Limited, Jarden, and Forsyth Barr Limited

https://autotalk.co.nz/turners-knock...-nzx-50-index/


i was looking at the register , it appears not many index funds on there at last report

[see weed]

Insight investor relations advisor James Schofield says he believes that that Turners Automotive Group is knocking on the door of inclusion in the NZX 50 index in December 2023, according to analyses by NZX Limited, Jarden, and Forsyth Barr Limited

https://autotalk.co.nz/turners-knock...-nzx-50-index/


i was looking at the register , it appears not many index funds on there at last report

Yes that is right. Basil on the stock talk site has been promoting this for last month or so. A good company but might wait for the dust to settle before grabbing anymore. But in the short term will grab some more HLG running into the next Div of 24c at 8.35% yld. and 10.73 PE. I think TRA may drop back a wee bit after inclusion like HLG did with all the short term profit traders. HLG dropped about a dollar in the week following inclusion. Should be quite interesting. But in saying that, I would top up with TRA at $3.80 to $4 if it dropped back there before or after inclusion.

[bull....]

Yes that is right. Basil on the stock talk site has been promoting this for last month or so. A good company but might wait for the dust to settle before grabbing anymore. But in the short term will grab some more HLG running into the next Div of 24c at 8.35% yld. and 10.73 PE. I think TRA may drop back a wee bit after inclusion like HLG did with all the short term profit traders. HLG dropped about a dollar in the week following inclusion. Should be quite interesting. But in saying that, I would top up with TRA at $3.80 to $4 if it dropped back there before or after inclusion.

hlg held up pretty well i reckon considering the small volumes in the stock. starting to fall away now maybe insto's finally loaded up

[winner69]

TRA share price not far off all time high of $4.61

That’ll be a good day

[percy]

https://sendy.tarawera.co.nz/l/J6oLV...umdcRGoF8RYvTg