In theory Ex and cum produce identical returns- i.e. when a stock goes Ex divvy it falls by the value of the dividend. But then that is the ideal / efficient market behaviour - which does not take into account dividend preferences.
The key downside risk is this: Telstra is a yield stock whose shareholders strongly prefer dividends to capital gains. Telstra has additionally run up well to the Ex date ($2.55 to $3.40). It is likely that a large number of fundies are hanging on to take the divvy and then sell at a capital gain. That would cause Telstra to fall by more than the divvy. [i.e. it is probably a good idea to sell now or be exposed to a short term loss - but over the long term TLS is a BUY!]
Since those same fundies prefer dividends they are likely to jump back in at some point probably in 3 to 4 months to build a stake prior to the next dividend.
The winning strategy could be to be contrarian, avoid the dividends and buy Telstra Ex Div. Doing so MAY get you Telstra a point or so cheaper due to dividend preferences driving valuation, but then dividend preference arbitrage is closely watched and priced out.
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Last
$3.92 |
Change
-0.030(0.76%) |
Mkt cap ! $45.29B |
Open | High | Low | Value | Volume |
$3.95 | $3.95 | $3.90 | $69.01M | 17.63M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 2108 | $3.91 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$3.92 | 282151 | 15 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
6 | 107404 | 3.900 |
28 | 479325 | 3.890 |
27 | 174286 | 3.880 |
12 | 68721 | 3.870 |
15 | 129136 | 3.860 |
Price($) | Vol. | No. |
---|---|---|
3.920 | 41027 | 5 |
3.930 | 84532 | 5 |
3.940 | 134479 | 8 |
3.950 | 204400 | 11 |
3.960 | 388135 | 21 |
Last trade - 16.10pm 27/09/2024 (20 minute delay) ? |
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