QUAD! Great turn around!

I’ve seen better stocks on the quad

I’m generally curious about this investment strategy. I see a stock that over the last year has dropped nearly 56% with a dividend payout that was recently cut in half ($0.30 per share per quarter to $0.15). And despite a huge beat bottom line and a beat on the top line, and a major improvement from the rest of year, I see a stock whose EPS has dropped from $0.53 a year earlier to $0.38 on revenue that has dropped from $1.17 to $1.07 billion.

Maybe I’m wrong with my approach, but if I’m looking at dividend stocks, I’m looking for both the relative short term (one year) and long term (5 year) history:

1. Price appreciation, or at the very least, the lack of depreciation.
2. Increasing dividend payout, or at the very least, a payout that doesn’t decrease.
3. If available, a positive future outlook, or at the best least, not a negative outlook from analysts.

And in regards to the first two points, this is why find dividend yields to be deceiving since they can be a result of poor performance (e.g., stock whose price has dropped significantly), and/or unsustainable (e.g., high payout ratios, sometimes exceeding 100%). As a result, I’ve rarely, if ever, found super high dividend yielding stocks (10% or higher) to be worthwhile as an investment for the future.

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I’m generally curious about this investment strategy. I see a stock that over the last year has dropped nearly 56% with a dividend payout that was recently cut in half ($0.30 per share per quarter to $0.15). And despite a huge beat bottom line and a beat on the top line, and a major improvement from the rest of year, I see a stock whose EPS has dropped from $0.53 a year earlier to $0.38 on revenue that has dropped from $1.17 to $1.07 billion.

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And everybody should look at all of those things. It's smart. At the same time, let's look at what the company is doing to correct the ship.

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Maybe I’m wrong with my approach, but if I’m looking at dividend stocks, I’m looking for both the relative short term (one year) and long term (5 year) history:

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Nothing wrong with that either, but when I purchased (for example) USA(of the top of my head) it was due to an over all picture. And due to that, I did not miss an 9 year run up with an 9.8% divi. Why, because the chart would have show a massive drop from the past 5 years and 1 year.

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And in regards to the first two points, this is why find dividend yields to be deceiving since they can be a result of poor performance (e.g., stock whose price has dropped significantly), and/or unsustainable (e.g., high payout ratios, sometimes exceeding 100%).

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Some do and you have to weed through them like JMLP, 15%. What's the point in a 15% divi with it's dropped every year for 10 years?


Here is one I'm considering....WPG. I'm watching them and have been for months. I've not purchased because of your #3. Also because they have not announced their divi. I expect them to either drop it, or cut it. If they drop it, I will not purchase. If the cut it and the changes made have a positive result, I may purchase.

Why? Beat down REIT company who owns a lot of malls. Now you are going to say brick and mortar is dead. I say, hear what they are doing and if the plan is viable, the company reduces debt, and the outlook is ok, purchase. Set your stop loss and watch.




Now my purchase of QUAD had little to do with the Divi. It had to do with the price point and potential gains over the years.


Also, keep in mind, I divide my investments up. These fall into my higher risk and I limit my purchases and sell to recoup my investment with hopes of free shares. I do that several ways:

- I will pull all of my investment out of QUAD and simply operate on the extra shares from the increased price. My risk... zero.

- I do it with options. I purchased MSFT calls @ 200 strike 3/20 for .13. At .30 I sold 50% and my money is off the table. I sold the rest at $2.35 on Feb 10th. purchased again at 1.1 and now holding...

- AMD. Purchased debit spreads. As soon as I could pull my money off the table, I did. Still have my april spreads that if they went to zero, I will have lost nothing.

I do it the same with high risk. I actually OWN shares in PER. The highest risk stock I own in fact. I purchased in Dec... $.86 I sold Feb 6th at $1.09. I did not wait for the ex divi date. I sold 75% of the shares because it equaled my investment. The remaining shares are mine and I don't care if it goes all the way to zero. But if it grows slowly over 10 years @ 1% and keeps the divi of 30%, That will give me a yearly divi of 9K and the amount of shares will equal about 37K.


Make sense?

Successful companies don’t pay a dividend when they need cash