OT: Stock and Investment Talk

[RU-05]

I didn't say they don't go up but even if it's up the share price reflects the dividend deduction.

From the article:

With dividends, the stock price typically undergoes a single adjustment by the amount of the dividend. The stock price drops by the amount of the dividend on the ex-dividend date.1 Remember, the ex-dividend date is the day before the record date. If investors want to receive a stock's dividend, they have to buy shares of stock before the ex-dividend date. The record date is the date the company determines who are shareholders who receive dividends. (The ex-dividend date is before the record date to allow transactions of the trade to settle before the record date.)

For example, suppose a stock trading for $50 per share declares a $0.50 dividend. On the ex-dividend date, the price adjusts to $49.50 ($50 minus the $0.50 dividend) for each share as of the record date. And that's it—no changes to the listed options strike prices or contract terms.

Charles Schwab

I didn't know there was a mechanical aspect to this.

But if the market can, and often does, override that Div payment reduction, then it doesn't matter. This from Investopedia:

The declaration of a dividend naturally encourages investors to purchase stock. Because investors know that they will receive a dividend if they purchase the stock before the ex-dividend date, they are willing to pay a premium.


This causes the price of a stock to increase in the days leading up to the ex-dividend date. In general, the increase is about equal to the amount of the dividend, but the actual price change is based on market activity and not determined by any governing entity.


On the ex-date, investors may drive down the stock price by the amount of the dividend to account for the fact that new investors are not eligible to receive dividends and are therefore unwilling to pay a premium.2


However, if the market is particularly optimistic about the stock leading up to the ex-dividend date, the price increase this creates may be larger than the actual dividend amount, resulting in a net increase despite the automatic reduction. If the dividend is small, the reduction may even go unnoticed due to the back and forth of normal trading.


Many people invest in certain stocks at certain times solely to collect dividend payments. Some investors purchase shares just before the ex-dividend date and then sell them again right after the date of record—a tactic that can result in a tidy profit if it is done correctly.

 

[rutgersguy1]

MMM starting to show some signs of breaking above that low-mid 90s area. I mentioned MMM could stop its decades long (like 50-60yrs) of not just paying but raising dividends. Seems like that news might have provided a little catalyst for it. New dividend after the spinoff is expected to be 40% of free cash flow and estimates that should be more than a 50% cut to the divy.

 

[rutgersguy1]

I didn't know there was a mechanical aspect to this.

But if the market can, and often does, override that Div payment reduction, then it doesn't matter. This from Investopedia:

The declaration of a dividend naturally encourages investors to purchase stock. Because investors know that they will receive a dividend if they purchase the stock before the ex-dividend date, they are willing to pay a premium.


This causes the price of a stock to increase in the days leading up to the ex-dividend date. In general, the increase is about equal to the amount of the dividend, but the actual price change is based on market activity and not determined by any governing entity.


On the ex-date, investors may drive down the stock price by the amount of the dividend to account for the fact that new investors are not eligible to receive dividends and are therefore unwilling to pay a premium.2


However, if the market is particularly optimistic about the stock leading up to the ex-dividend date, the price increase this creates may be larger than the actual dividend amount, resulting in a net increase despite the automatic reduction. If the dividend is small, the reduction may even go unnoticed due to the back and forth of normal trading.


Many people invest in certain stocks at certain times solely to collect dividend payments. Some investors purchase shares just before the ex-dividend date and then sell them again right after the date of record—a tactic that can result in a tidy profit if it is done correctly.

Sure but my point is if you try to "sneak in and out" it's not as if the dividend came to you for "free," it's reflected in the stock price. Normal trading may cover up that fact but it was taken out of the stock price is my point. Any one can do what they like but I don't particularly think sneaking in and out of a stock just for the ex-dividend date is a good idea especially if it's done time and again as a strategy. If you think a stock is undervalued or may rebound in time and want to collect the dividend in the meantime that IMO is a better tact but to each his own.

Also I don't know if it's "mechanical" so to speak. Say the company had 1B in cash. 200M of that cash is used to pay a dividend. The company has 200M less in cash on the books so it's worth 200M less in a manner of speaking so the share price reflects it.

 

[RU-05]

Sure but my point is if you try to "sneak in and out" it's not as if the dividend came to you for "free," it's reflected in the stock price. Normal trading may cover up that fact but it was taken out of the stock price is my point. Any one can do what they like but I don't particularly think sneaking in and out of a stock just for the ex-dividend date is a good idea especially if it's done time and again as a strategy. If you think a stock is undervalued or may rebound in time and want to collect the dividend in the meantime that IMO is a better tact but to each his own.

But as noted, the stock can go up prior to the ex date as people try to get in.

And my point was more, if you want to get in on a mid to longer term trade, or even as an investment, might as well get in prior to the div. Was not saying get in now, get the div and then sell on ex date.

I was not aware though of the mechanical price action, so thanks for the edumacation.

 

[rutgersguy1]

But as noted, the stock can go up prior to the ex date as people try to get in.

And my point was more, if you want to get in on a mid to longer term trade, or even as an investment, might as well get in prior to the div. Was not saying get in now, get the div and then sell on ex date.

Yea I understood the point you made, I was just giving an FYI for anyone who may not know how a dividend works and thinks about doing that.

 

[RU-05]

SBUX getting hit hard post earnings.

And this is not an instance of selling off after a big run up and good earnings numbers. Earnings and Rev's miss and down.

 

[T2Kplus20]

SBUX getting hit hard post earnings.

And this is not an instance of selling off after a big run up and good earnings numbers. Earnings and Rev's miss and down.

The China market really hurt them this quarter. If that gets baked in.....buy the dip?

 

[T2Kplus20]

Powell - Fed to start QT tampering. Time to buy TLT/TMF?

 

[rutgersguy1]

SBUX getting hit hard post earnings.

And this is not an instance of selling off after a big run up and good earnings numbers. Earnings and Rev's miss and down.

Mentioned it above. China and weaker consumer (similar to MCD news) are part of it. It's around a support (lows 70s area) but if it doesn't hold, low 60s can come into play.

I feel like MCD might have more levers to pull to try and get back the more value conscious consumer. I do wonder about "golden arches" for MCD as in potential double top lol. It does have strong long term support at 250 area though.

CMG did fine though this past qtr.

https://www.cnbc.com/2024/05/01/starbucks-mcdonalds-yum-earnings-show-consumers-pulling-back.html

 

[T2Kplus20]

Mentioned it above. China and weaker consumer (similar to MCD news) are part of it. It's around a support (lows 70s area) but if it doesn't hold, low 60s can come into play.

I feel like MCD might have more levers to pull to try and get back the more value conscious consumer. I do wonder about "golden arches" for MCD as in potential double top lol. It does have strong long term support at 250 area though.

CMG did fine though this past qtr.

https://www.cnbc.com/2024/05/01/starbucks-mcdonalds-yum-earnings-show-consumers-pulling-back.html

Everyone loves burritos, even with the recent price increases. Still the best lunch out there. Chicken Al Pastor rules!

 

[RU-05]

Everyone loves burritos, even with the recent price increases. Still the best lunch out there. Chicken Al Pastor rules!

I look for values in my fast food, Whopper Wednesdays at BK.

And I'm not adding in fries or a drink, $3 and I'm out.

Chipotle has their rewards, and I recently got a free burrito out of it, but if it's Wednesay, I'm going to to BK.

 

[T2Kplus20]

I look for values in my fast food, Whopper Wednesdays at BK.

And I'm not adding in fries or a drink, $3 and I'm out.

Chipotle has their rewards, and I recently got a free burrito out of it, but if it's Wednesay, I'm going to to BK.

My go-to quick lunch:
Burrito bowl = double chicken al pastor, brown rice, corn salsa, cheese.

Very simple. About $12-13, but very good, consistent, and relatively low sodium for a lunch option.

 

[RU-05]

My go-to quick lunch:
Burrito bowl = double chicken al pastor, brown rice, corn salsa, cheese.

Very simple. About $12-13, but very good, consistent, and relatively low sodium for a lunch option.

I'm not scared of salt.

My "problem" with Chipotle is, while good, and not expensive per se, I can make about 10 bean burrito's at home for the price of one in the store.

Black beans are super cheap.

 

[T2Kplus20]

I'm not scared of salt.

My "problem" with Chipotle is, while good, and not expensive per se, I can make about 10 bean burrito's at home for the price of one in the store.

Black beans are super cheap.

Can't make their chicken al pastor, so that is the big rate limiting step. Love their shredded beef as well. There is a Chipotle with a drive thru near my office, so I do that at least once a week (only 50/50 with office vs home).

 

[coloradoknight]

I didn't know there was a mechanical aspect to this.

But if the market can, and often does, override that Div payment reduction, then it doesn't matter. This from Investopedia:

The declaration of a dividend naturally encourages investors to purchase stock. Because investors know that they will receive a dividend if they purchase the stock before the ex-dividend date, they are willing to pay a premium.


This causes the price of a stock to increase in the days leading up to the ex-dividend date. In general, the increase is about equal to the amount of the dividend, but the actual price change is based on market activity and not determined by any governing entity.


On the ex-date, investors may drive down the stock price by the amount of the dividend to account for the fact that new investors are not eligible to receive dividends and are therefore unwilling to pay a premium.2


However, if the market is particularly optimistic about the stock leading up to the ex-dividend date, the price increase this creates may be larger than the actual dividend amount, resulting in a net increase despite the automatic reduction. If the dividend is small, the reduction may even go unnoticed due to the back and forth of normal trading.


Many people invest in certain stocks at certain times solely to collect dividend payments. Some investors purchase shares just before the ex-dividend date and then sell them again right after the date of record—a tactic that can result in a tidy profit if it is done correctly.

In the end all you accomplished is creating a taxable event for yourself and you got your own money back. Since you didn't hold the shares for 60 days before X date, the dividend is taxed as ordinary dividend at a higher rate than qualified dividends. This will probably be offset by a short term loss. So, if you buy a $10 stock that pays a $1 dividend, on x date you have a $9 dollar stock and a future payment of $1 dividend. you still have e $10 in value minus the tax consequences. If it were as easy as stated, every would do it. There is no such thing as free money.

 

[T2Kplus20]

In the end all you accomplished is creating a taxable event for yourself and you got your own money back. Since you didn't hold the shares for 60 days before X date, the dividend is taxed as ordinary dividend at a higher rate than qualified dividends. This will probably be offset by a short term loss. So, if you buy a $10 stock that pays a $1 dividend, on x date you have a $9 dollar stock and a future payment of $1 dividend. you still have e $10 in value minus the tax consequences. If it were as easy as stated, every would do it. There is no such thing as free money.

I prefer stock buybacks than dividends. It's all about price action.

 

[rutgersguy1]

In the end all you accomplished is creating a taxable event for yourself and you got your own money back. Since you didn't hold the shares for 60 days before X date, the dividend is taxed as ordinary dividend at a higher rate than qualified dividends. This will probably be offset by a short term loss. So, if you buy a $10 stock that pays a $1 dividend, on x date you have a $9 dollar stock and a future payment of $1 dividend. you still have e $10 in value minus the tax consequences. If it were as easy as stated, every would do it. There is no such thing as free money.

Good point about qualified dividends

 

[RU-05]

Can't make their chicken al pastor, so that is the big rate limiting step. Love their shredded beef as well. There is a Chipotle with a drive thru near my office, so I do that at least once a week (only 50/50 with office vs home).

No drive thru's near me.

Which is unfortunate, app to drive thru ordering is super convenient.

 

[T2Kplus20]

Nice pop for PFE yesterday. My calls were up 28%. Bunch of price target increases as well. PFE to the MOON! :)

 

[RU-05]

Nice pop for PFE yesterday. My calls were up 28%. Bunch of price target increases as well. PFE to the MOON! :)

QCOM also with a nice pop off earnings.

Big auto chip numbers I believe.

$180 looks like a level it needs to get through. Otherwise, double top.

 

[T2Kplus20]

QCOM also with a nice pop off earnings.

Big auto chip numbers I believe.

$180 looks like a level it needs to get through. Otherwise, double top.

QCOM may be a good long play. Smart phones are going to get a heavy dose of AI technology. Lots of customer upgrades in the future.

https://www.cnbc.com/2024/05/01/qualcomm-earnings-report-q2-2024.html

 

[RU-05]

I have HII tanking off earnings, despite an EPS beat and rev's in line.

Had a good run after a big beat last qtr, selling off because a much more modest beat this qtr?

Tempted to add, $250 was resistance, let's see if it's now support.

But I've about had it with the defense stock's.

 

[rutgersguy1]

Nice pop for PFE yesterday. My calls were up 28%. Bunch of price target increases as well. PFE to the MOON! :)

I always say anything is tradeable even zombies like PFE, INTC etc..

It's flirting with the 50DMA again and hasn't been able to stay above it for a little over a year. It's been rejected every time. 11th time may be the charm lol. There's some resistance more directly above above but the 200DMA currently near 30 will likely be much harder and won't likely be broken any time soon.

One of the halftime traders yesterday said she owned it and said it needs to get through the covid one off and it's nothing exciting and maybe you get mid single digit growth and get 6% yield etc... I can agree with that. It's the same way I can see a stock like VZ. You get in at decent price with a good yield and eventually the stock can rise and you get a decent gain plus the dividend you collected. But it's generally not making any big moves. Not everything has to go to the moon and PFE certainly isn't barring some big breakthrough drug.

Speaking of the moon, NVO is like a sidekick to LLY. Their diabetes franchise which was their thing and pretty strong but now it’s their weight loss franchise and even stronger lol. Down today on some good earnings but not good enough.

https://www.cnbc.com/2024/05/02/novo-nordisk-earnings-q1-2024-weogovy-sales-double.html

Also news on fast food/restaurant:

US fast-food chains may have to amp up promotions as more people eat at home

Global fast food giants may have to dole out steeper promotions to lure inflation-hit customers who are increasingly opting to eat at home, following weak sales from the likes of McDonald's and Starbucks this week. Disposable income in the United States is declining, particularly in the...

www.yahoo.com

 

[RU-05]

I always say anything is tradeable even zombies like PFE, INTC etc..

It's flirting with the 50DMA again and hasn't been able to stay above it for a little over a year. It's been rejected every time. 11th time may be the charm lol. There's some resistance more directly above above but the 200DMA currently near 30 will likely be much harder and won't likely be broken any time soon.

One of the halftime traders yesterday said she owned it and said it needs to get through the covid one off and it's nothing exciting and maybe you get mid single digit growth and get 6% yield etc... I can agree with that. It's the same way I can see a stock like VZ. You get in at decent price with a good yield and eventually the stock can rise and you get a decent gain plus the dividend you collected. But it's generally not making any big moves. Not everything has to go to the moon and PFE certainly isn't barring some big breakthrough drug.

Speaking of the moon, NVO is like a sidekick to LLY. Their diabetes franchise which was their thing and pretty strong but now their weight loss franchise and even stronger lol. Down today on some good earnings but not good enough.

https://www.cnbc.com/2024/05/02/novo-nordisk-earnings-q1-2024-weogovy-sales-double.html

Also news on fast food/restaurant:

US fast-food chains may have to amp up promotions as more people eat at home

Global fast food giants may have to dole out steeper promotions to lure inflation-hit customers who are increasingly opting to eat at home, following weak sales from the likes of McDonald's and Starbucks this week. Disposable income in the United States is declining, particularly in the...

www.yahoo.com

PFE with the positive follow up day after yesterday’s big move is encouraging.

 

[T2Kplus20]

I always say anything is tradeable even zombies like PFE, INTC etc..

It's flirting with the 50DMA again and hasn't been able to stay above it for a little over a year. It's been rejected every time. 11th time may be the charm lol. There's some resistance more directly above above but the 200DMA currently near 30 will likely be much harder and won't likely be broken any time soon.

One of the halftime traders yesterday said she owned it and said it needs to get through the covid one off and it's nothing exciting and maybe you get mid single digit growth and get 6% yield etc... I can agree with that. It's the same way I can see a stock like VZ. You get in at decent price with a good yield and eventually the stock can rise and you get a decent gain plus the dividend you collected. But it's generally not making any big moves. Not everything has to go to the moon and PFE certainly isn't barring some big breakthrough drug.

Speaking of the moon, NVO is like a sidekick to LLY. Their diabetes franchise which was their thing and pretty strong but now it’s their weight loss franchise and even stronger lol. Down today on some good earnings but not good enough.

https://www.cnbc.com/2024/05/02/novo-nordisk-earnings-q1-2024-weogovy-sales-double.html

Also news on fast food/restaurant:

US fast-food chains may have to amp up promotions as more people eat at home

Global fast food giants may have to dole out steeper promotions to lure inflation-hit customers who are increasingly opting to eat at home, following weak sales from the likes of McDonald's and Starbucks this week. Disposable income in the United States is declining, particularly in the...

www.yahoo.com

If I really like a stock, I will buy and hold. I have many of these in my personal account via the 2 FS Insights stock lists and 8-10 of my own.

However, for shorter term plays where I think a stock will pop, I have been using leap calls just out of the money. My goal is to invest/risk only a small amount and catch a rebound rally after a kitchen sink earnings report (you know, one of this reports that resets the bar very, very low). Or if I see a quality company with an oversold RSI.

No set rules on when I will sell. Just a feel on what is going on. I'm hoping for PFE to rebound to $31'ish. That would likely 2x my calls.

 

[RU-05]

RIVN’s day goes from good to really good on news of a $1b grant from Illinois to build the plant which was supposed to be built in Ga to Il instead.

Up 10% and back over $10

 

[RU-05]

Baba over $80. Had been stuck in the mud below that level for 6 months.

 

[T2Kplus20]

RIVN’s day goes from good to really good on news of a $1b grant from Illinois to build the plant which was supposed to be built in Ga to Il instead.

Up 10% and back over $10

Very good news. They need to get those R2 and R3 models online ASAP.

 

[RU-05]

Very good news. They need to get those R2 and R3 models online ASAP.

I don’t think there is a huge rush, as the initial push did cool, but you want to be there when the next run happens.

 

[voltz99]

SMCI reports today.

Not in it.

A lot of insiders were selling it short when it hit $1000. Dont know about now.

One analyst last week predicted the target number is about $250.

 

[Postman_1]

 

[T2Kplus20]

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HOLY HELL! That's one heck of a stock buyback even for AAPL.

Great quarter with a double beat. And AAPL still hasn't dropped their AI plans yet. This stock has a lot of room to run.

 

[Postman_1]

HOLY HELL! That's one heck of a stock buyback even for AAPL.

Great quarter with a double beat. And AAPL still hasn't dropped their AI plans yet. This stock has a lot of room to run.

Guess we gotta wait a little bit

Cook also said Apple has “big plans to announce” from an “AI point of view” during its iPad event next week and at the company’s annual developer conference in June.

 

[rutgersguy1]

Oral weight loss still elusive

https://www.cnbc.com/2024/05/02/amgen-scraps-experimental-weight-loss-pill-moves-forward-with-injection.html

 

[T2Kplus20]

Oral weight loss still elusive

https://www.cnbc.com/2024/05/02/amgen-scraps-experimental-weight-loss-pill-moves-forward-with-injection.html

Whatever company that figures out the oral option will go KABOOM! Maybe I should do some research? Worth the effort.

 

[mildone]

Oral weight loss still elusive

I'm not gonna say it. Nope. No. Hell no!





Oh why not... That's what she said.

 

[T2Kplus20]

Jobs report comes in soft with unemployment up. This is the report the Fed has been waiting for. Yields dump, stock futures pop. Cuts coming soon?

 

[rutgersguy1]

Oral weight loss still elusive

https://www.cnbc.com/2024/05/02/amgen-scraps-experimental-weight-loss-pill-moves-forward-with-injection.html

AMGN up 15%+ on earnings and new of their injectable weight loss drug entering phase 3. NVO, LLY down. As others enter the weight loss fray to gorge at the trough it's going to be harder for LLY and NVO to keep on their incredible run.

 

[RUinPinehurst]

Jobs report comes in soft with unemployment up. This is the report the Fed has been waiting for. Yields dump, stock futures pop. Cuts coming soon?

December at the earliest....

 

[T2Kplus20]

December at the earliest....

Sounds like June if the next round of inflation comes in soft. Make the first cut and then get out of the way for the election. Second cut in December.