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54.5¢ slater & gordon limited

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Mightyatom

3,147 Posts.

29/09/15

17:18

Post #: 16082274
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Originally posted by primaus72 ↑

another reason to hold for the long term is the 50% CGT discount.

Lets say you hold 100,000 shares at avg price $2.90 = $290k opening position and have marginal tax rate of 37%. Omitted brokerage/divs for simplicity and used a home loan rate of 4.3% for carrying costs.

ASIC tick and stat results OK.. SGH spikes to $4 in a month.

Therefore, gain is $400k-290k = $110k
CGT tax payable = 110k x 37% = 40.7k
carrying costs = (290k x 4.3%) x 30 / 365 = $1.02k
Net profit: 110k-40.7k - 1.02k = 68.28k

However, in 12 months time lets just say SP is still $4 and applying 50% CGT discount
Therefore, gain is $400k-290k = $110k
CGT tax payable = (110k/2) x 37% = 20.35k
carrying costs = 290k x 4.3% = 12.47k
Net profit: 110k-20.35k - 12.47k = 77.18k

Extra kicker is that the carrying costs are tax dectuctible.

So about 10k additional profit vis-a-vis + the additional prospect of a much high SP due to H16 results.

Therefore, makes sense to hold for at least 12months.

underlying assumption: world does not self destruct within the next 12months & SGH not involved in large scale fraud

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A good fact primaus. Not for me though, it is my business so no CGT discount unfortunately! No problem, a profit is a profit and happy to contribute a slice of that profit to helping run the country

SGH Price at posting: $2.87 Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

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Short Squeeze, page-18

Top Stories

Olam Agri raises Namoi takeover offer to 75 cents a share and receives shareholder backing

Dale Gillham's weekly wrap: US fracking support boosts outlook for Australian gas stocks

Enova Mining unveils "high-grade" REE drill hits at Coda North, Brazil

Vulcan appoints investment bank and M&A veteran to board

Antipa divests its Citadel interest to JV partner Rio for A$17M, refocuses on Minyari Dome

Medallion Metals kicking off 15,000m drill run at Ravensthorpe gold play

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