Many always point to dividend hunters buying before the share goes ex div and holding for 45 days. If you chart the price over the past 30 days SOL is up 12.28%. and the all share (XAO) is up 2.11%. I am not sure the numbers released were that much better than expected. Maybe the dividend was a bit higher but really very often these shares seem to climb far more than the implied franking added to the dividend.
It even happens with shares not performing well.
I tried to do an exercise:
So there is 10% up that's is around say $2.80 taking out the general market move.
The dividend is only 36cents and franking is 15.5c. If you then take the potential loss on sale and purchase within one year then in fact unless this stays above $30 they would probably lose and be better off selling now. So if they hold beyond then, are these fall backs are what?
1. Just the market reacting to a boring company with little information flow. 2. A group who are trying to gain franking credits as they have a zero tax rate via the retirement phase of superannuation and that plus the payment of dividends means that they keep trying to accrue franking credits and capital losses each year.. 3. A market that is so inefficient as for a group to keep overpaying during the cycle between results and going ex dividend. 4. Or I am missing something.
SOL Price at posting:
$31.76 Sentiment: None Disclosure: Held
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