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28-08-2014, 02:44 PM
#1521
http://www.sharechat.co.nz/article/3...4-bln-losshtml
Jetstar loses ground in New Zealand.
I also had a quick look at the Qantas horror result and noticed contained therein a mention that there was to be no new routes for Jetstar for the forseeable future or words to that effect...
PS Three other things to know about dividend stripping. Based on a study I've seen approximately 80% of companies share prices regain the initial SP dividend drop within 3 weeks and secondly anyone on an income tax bracket below $48,000 (i.e. tax rate of 17.5%) will normally get a meaningful advantage conferred upon them with fully imputed dividends having imputation credits attached at the company tax rate of 28% and finally the bigger the dividend as a percentage of the stock price, (in this case a whopper at 7%), the more likelihood of dividend stripping being a successful trading strategy
Last edited by Beagle; 28-08-2014 at 03:00 PM.
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28-08-2014, 03:16 PM
#1522
Member
Weird.. according to Wikipedia, 'Dividend stripping is the purchase of shares just before a dividend is paid, and the sale of those shares after that payment'
Surely it makes more sense, to snap out shares the day AFTER a divy assuming the SP falls, and selling when it's returned to pre-div levels (assuming it's a quality company).
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28-08-2014, 03:18 PM
#1523
Originally Posted by tzbang
So.. doesn't that mean people can buy in just prior, get the divy and then sell? Causing a quick spike & fall in SP?
If your'e thinking about Div stripping or just buying ahead of the dividend and leaving everything until the last moment ...remember buying shares takes 3 days to transact...the ex date (12th Sept) is the registry date
Last edited by Hoop; 28-08-2014 at 03:20 PM.
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28-08-2014, 03:27 PM
#1524
Member
yeah so, buy the day after the divy when it's fallen.. takes 3 days... by then it's probably returned to pre-div levels and sell? Seems too easy.
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28-08-2014, 03:28 PM
#1525
Originally Posted by tzbang
Weird.. according to Wikipedia, 'Dividend stripping is the purchase of shares just before a dividend is paid, and the sale of those shares after that payment'
Surely it makes more sense, to snap out shares the day AFTER a divy assuming the SP falls, and selling when it's returned to pre-div levels (assuming it's a quality company).
Either practice can be equally effective. If the record date is the 12th, this should mean they trade ex divvy on the 10th Sept so those looking to play this game will need to ante-up soon if they haven't already
Last edited by Beagle; 28-08-2014 at 03:31 PM.
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28-08-2014, 03:35 PM
#1526
Not all shares have the same behaviour. Then you have to remember that by regularly doing this you may become a trader which has tax implications. Another subject all together.
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28-08-2014, 03:36 PM
#1527
Originally Posted by tzbang
yeah so, buy the day after the divy when it's fallen.. takes 3 days... by then it's probably returned to pre-div levels and sell? Seems too easy.
Takes 3-4 weeks on average to recover the divvy and yes, it is easy but with some caveats. Some for example would claim the SP is already starting to build the forthcoming divvy into itself, (dividend hounds chasing a strong divvy)...others, myself included would say it was a very strong result and furthermore the outlook for 2015 is also good so the increase in price yesterday and today has nothing to do with the forthcoming divvy and there's still a free lunch on the table
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28-08-2014, 06:19 PM
#1528
Originally Posted by tzbang
yeah so, buy the day after the divy when it's fallen.. takes 3 days... by then it's probably returned to pre-div levels and sell? Seems too easy.
You can't guarantee that the share price will drop by the same amount as the dividend and if it does it may only remain that way for a short time, from memory the studies done show an average drop of 77% across a broad range of stocks immediately going ex divvy and given Air Nz strong result the rebound may occur in a shorter time frame than normal. As 777 said not all shares behave the same, one example was TEL last year when the price didn't drop at all going ex divvy and in fact started climbing soon after, some people believe buying ex divvy gives them a better return if they intend to hold as they save the tax they would have paid on the divvy assuming as mentioned above the share price sheds the full divvy,food for thought anyway.
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28-08-2014, 06:24 PM
#1529
Member
Originally Posted by couta1
one example was TEL last year when the price didn't drop at all going ex divvy and in fact started climbing soon after, some people believe buying ex divvy gives them a better return if they intend to hold as they save the tax they would have paid on the divvy assuming as mentioned above the share price sheds the full divvy,food for thought anyway.
I recall meridian behaving similarly earlier this year. Rising by the amount of the dividend following the ex date
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28-08-2014, 06:27 PM
#1530
Originally Posted by couta1
some people believe buying ex divvy gives them a better return if they intend to hold as they save the tax they would have paid on the divvy assuming as mentioned above the share price sheds the full divvy,food for thought anyway.
The dividend is fully imputated so that argument does not apply here.
No advice here. Just banter. DYOR
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