The market isn't always efficent when it comes to pricing in the dividend. Things get confusing around dividend time and Christiaan makes it his business to test whether the market is pricing in the dividend correctly. More often than not there's an opportunity to make some money. Christiaan then compares the mispricing to the momentum of the share to establish his directional play.
An example of his recommendation might go as follows:
There is a few dividend opportunities this week LTD Friday 08 April.
The results are as follow.
|
Share
|
Declaration Date
|
LTD Date
|
Dividend
|
Dividend Yield
|
Final Decision
|
|
OML
|
8-Mar-11
|
8-Apr-11
|
31.42
|
2.09188%
|
LONG
|
|
MND
|
21-Feb-11
|
8-Apr-11
|
157.7
|
2.56006%
|
SHORT
|
|
GRF
|
14-Feb-11
|
8-Apr-11
|
52
|
1.7010%
|
LONG
|
All the dividend yields are reasonable. Old Mutual and Group Five have positive momentums going into this week with Mondi having a negative momentum.
My two preferred dividend plays is OML Long and MND Short as it has a more negative momentum going into the dividend.
Keep in mind that liquidity could be a problem with buying Group Five for the dividend.
To receive our latest Follow Me| Divi Strip email followme@vunaniprivateclients.co.za.
The market isn't always efficent when it comes to pricing in the dividend. Things get confusing around dividend time and Christiaan makes it his business to test whether the market is pricing in the dividend correctly. More often than not there's an opportunity to make some money. Christiaan then compares the mispricing to the momentum of the share to establish his directional play.
An example of his recommendation might go as follows:
There is a few dividend opportunities this week LTD Friday 08 April.
The results are as follow.
|
Share
|
Declaration Date
|
LTD Date
|
Dividend
|
Dividend Yield
|
Final Decision
|
|
OML
|
8-Mar-11
|
8-Apr-11
|
31.42
|
2.09188%
|
LONG
|
|
MND
|
21-Feb-11
|
8-Apr-11
|
157.7
|
2.56006%
|
SHORT
|
|
GRF
|
14-Feb-11
|
8-Apr-11
|
52
|
1.7010%
|
LONG
|
All the dividend yields are reasonable. Old Mutual and Group Five have positive momentums going into this week with Mondi having a negative momentum.
My two preferred dividend plays is OML Long and MND Short as it has a more negative momentum going into the dividend.
Keep in mind that liquidity could be a problem with buying Group Five for the dividend.
To receive our latest Follow Me| Divi Strip email followme@vunaniprivateclients.co.za.