LNN - Lion Nathan

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moleman

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Post Number: 183
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Friday, May 19, 2006 - 03:16 pm:

Hi

Results came out yesterday. LNN is paying a 19c dividend as well as a 30c special dividend, both FF, with the ex-div date 2/6. Also the company is planning to buy back 5% of their stock. This is a dividend play for me that may become a long term hold.

cheers

moleman (holding)

ingot54

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Friday, May 19, 2006 - 03:40 pm:

Thanks Moleman - this is interesting.

Off hand, do you know the day LNN has to be held to qualify for these dividends?

ie Before the Ex-Div day, or some weeks prior?

Thanks in advance

Ivan

Keep Smiling

Trading style :CFD's predominantly long term.

moleman

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Friday, May 19, 2006 - 04:04 pm:

Hi Ivan

The ex-div date, or record date, is 2/6. So when the market opens on 2/6 if you have bought before then, even at the close on 1/6, you are recorded as the holder and get the dividend. You could even sell that morning and keep the dividend and franking credits. You do need to watch out for the 45-day rule though (see ATO site) if you make more than $5000 worth of franking credits. Unfortunately you don't get franking credits if you trade using CFDs.

I've found trading up to the ex-div date is a great way to improve your success rate. Macquarie claim 64% of shares outperform the market before the ex-div date (http://www.macquariecfd.com.au/emg/cfd/cfd_trading_ideas_and_info.htm) so if a share is in a solid uptrend the odds have to be in your favour. Currently I subscribe to a site that sends me released results and upcoming dividend info for a small fee. For some reason IC blocks the name but I'll email it to you if you're interested.

cheers

moleman

ingot54

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Friday, May 19, 2006 - 09:53 pm:

Cheers Moleman - and thanks for the site - now entrenched in "Favourites" menu.

LNN has quite a deal of volatility. When entering using CFD's for "dividend harvesting" this could be disastrous, or a bonus.

Dividend yield at current prices is extremely attractive - 4.72% - and this is a 6-month yield! Entering early might also lock in some growth, leading up to the record date.

We're looking at 10 trading days remaining before the record date, so, providing the suppression of current sentiment lifts, and further enthusiasm is enlisted for the outstanding performance of LNN, there is opportunity here ... if you accept the risk.

How do you see this risk unfolding, Moleman? Are there any obstacles to trap the unwary?

With the 5% buy-back this year, I expect less correction in the price Ex-Div, or at the least, a rapid recovery in the share price afterwards ... perhaps within a couple of weeks.

Given the increasing EPS mooted in the report, I think this is "safer" than some right now, and worth a risk.

Keep Smiling

Trading style :CFD's predominantly long term.

ingot54

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Friday, May 19, 2006 - 09:56 pm:

The chart

Keep Smiling

Trading style :CFD's predominantly long term.

moleman

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Post Number: 185
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Sunday, May 21, 2006 - 12:13 pm:

Hi Ingot54

There's an advantage to holding the shares for this one as the franking credits are worth 3/7*49 = 21c which you won't get with CFDs. So you could look at this as a (21+49)/825 = 8.5% yield. On a standard Commsec margin loan you can borrow 70% so if you did a dividend strip over a month say, that could mean a 8.5%/(1-0.7) = 28.3% return which isn't too bad. Don't know, guess it depends on how much bang for your buck you want... for me, the extra 21c is a useful buffer.

There seems to be a struggle between bulls and bears which would account for the volatility. On Thursday LNN went up after the results announcement even though the market had a huge drop, but left an upper wick, and then Friday was a down day. The result was good with unexpected bonuses and we certainly didn't see a capitulation of buyers after it came out. With long term TMF positive for 15 months and, as the chart shows, the trend up, I'm not too worried about the noise. Short term, $8.00 is obvious support and then $7.85. I'm treating the drop on April 5th to $7.61 as unusual so this seems like a good place to put my stop.

good luck!

Moleman

dug

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Sunday, May 21, 2006 - 12:29 pm:

Hi moleman,Ingot,
Where's the last dividend payment?Back there in Dec/Jan?

cheers.

Avatar- PHACOPS{speculator}from the Devonian Period.

moleman

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Monday, May 22, 2006 - 09:39 am:

Hi Dug

Yes that's right. LNN pays out every 6 months.

cheers

Moleman

dug

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Monday, May 22, 2006 - 09:49 am:

I realise that moleman.They dividend at a different time [earlier]because they're 'foreign' too.
I was wondering on your thoughts of History Repeating because that's a pretty savage post div fall in Dec and wouldn't bode too well for a Div play this half?
Or is it markedly different now to then?so the price will hold up better post dividend now it's just back to the December cum dividend level?
cheers.

Avatar- PHACOPS{speculator}from the Devonian Period.

moleman

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Monday, May 22, 2006 - 10:31 am:

Hi Dug

The share price will fall on the ex-dividend date not the payout date and you can expect it to fall by the divvy amount but sometimes divvy amount and franking credits. I think the Dec/Jan fall is volatility in a long term uptrend.

For the last 3 payouts you've made money on the ex-div day. eg Dec 9th 2005 close at $7.44, ex-date Dec 12 close at $7.32 and you've picked up 17c + 7.3c franking credits. December 23rd and the close is $7.45. So this can be a good method for getting on a long term trend.

cheers

Moleman

dug

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Monday, May 22, 2006 - 11:31 am:

Stupid me,I misread the Chart.Still haven't absorbed what Bloody year I'm in!![allowed to use 'bl**dy?it's govt approved like?]anyway STUPID me was looking at 2004 December so apologies,moleman carry on?

Avatar- PHACOPS{speculator}from the Devonian Period.

moleman

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Tuesday, May 23, 2006 - 07:30 pm:

Oops... Record date is 2nd June, ex-div date is 29th May.

moleman

ingot54

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Thursday, May 25, 2006 - 01:40 am:

MM - I took a few LNN, anticipating a good run up to the record date.

My strategy here is to sell at the close on the record date, effectively missing the dividend, PROVIDING there is enough in it in the run up.

If there is still gross nervousness in the market, I may wait a day or two until the bounce, and buy back in at the lower price.

This strategy achieves two things - I receive the advantage of the speculative price increase leading up to record day, and I avoid the sell-down ex-div.

Then, if the sell-down is far in excess of the correction for the dividend, I can load up for a long term trade hold.

In this way, I receive fair compensation for missing the dividend. I could even take a risk of boosting returns by shorting at the close on record day, with a very tight stop.

All purely hypothetical, I hasten to add. And the strategy will depend on whether the call for a correction, ex-div, is on the mark. Some stocks do not correct as much as the div, but these are rare, as you know.

Just a scenario. Of course I might be out of the trade sooner than that if the market sours again!

Looking for a safe play, but not wanting to miss an opportunity.

Keep Smiling

Trading style :CFD's predominantly long term.

moleman

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Thursday, May 25, 2006 - 03:32 pm:

Hi Ingot54

MM - I like it. :-) I've looked at the last 4 ex-div dates and the difference between the close before the ex-date minus the dividend and the close on the ex-date is at worst only 1c loss on 30/5/05, not including the franking credits. All others you were better off the next day so probably not a good idea to short since you'd be paying the dividend.

But I don't know how much of a runup we're going to get with this market... hopefully the US and commodities will be up for the last day before the ex-div date, taking us with them. LNN has outperformed the market over the last week but everything is just so blah.

cheers

MM

ingot54

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Sunday, May 28, 2006 - 06:12 am:

MM - thanks for that.

As it turns out I mis-read the ex-div date. The last day to hold in order to receive the div has passed - Friday 26th.

This calls for a change of plan: Given that the previous recovery of sp after ex-div has been around 10 days, I plan to buy the dip on maybe Monday afternoon at the close, or if still being sold down on sentiment, wait until Tuesday or Wednesday.

I intend to hold my present package for the longer term.

I am holding as CFD's with wide stops in the present atmosphere.

Thanks for the alert on this one

Keep Smiling

Trading style :CFD's predominantly long term.

ingot54

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Tuesday, May 30, 2006 - 04:46 pm:

How did you go MM?

I held for the div. (49 cents = +/- 6%)

Closing price $7.73 - 56 cents under the Friday close.

Did not buy more as I was expecting a bit more retracement based on current market jitters, thinking many people who were holding on for the div would dump. I had a contingent buy at $7.57 but deleted it this morning after the open. If it hits the buy now, it might be on adverse news. I have done enough speculation with LNN.

There is still a bit of value at $7.73, but this is way out of my ordinary type of investment, and I don't feel comfortable playing around.

Also interesting: today LNN officially ended the off-market bid for Coopers. This was a foregone conclusion, and had been factored in for months.

But it technically frees LNN to pursue further acquisitions, as they are oozing cash right now, with nowhere to spend it.

The $5 mill re-purchase of shares programme, and the lift in div from 70% to 80% of net earnings, really does make LNN a better long-term proposition. I would not be surprised if a further special div arrives in the Christmas stocking.

What are the likely targets LNN might be interested in now?

Just a further point: Those who bought on the close Friday at $8.28 on 4 times normal daily volume must have huge hopes for LNN.

I'll r/v in 2 weeks. Will the gap close? Meanwhile I hold, with firm stop.

Lnn_1

Keep Smiling

Trading style :CFD's predominantly long term.

moleman

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Tuesday, May 30, 2006 - 05:16 pm:

Hi Ingot54

I got in at $8.25 and picked up 70c in dividends and franking credits - the way I see it, I'm up 18c. No idea about takeover targets... But I can't see any reason to sell now and am hopeful that in a few weeks we'll be back to the $8.20s for a decent dividend strip.

cheers

MM

ingot54

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Wednesday, May 31, 2006 - 10:58 am:

Quite a vote of confidence this morning at the open.

Initially opened down 2.7% @ $7.52 but has enjoyed a slashing run to get back to yesterday's close as I write.

About one third of the avg daily vol has been traded in this first hour, so the confidence seems to be well-founded.

My plan is to hold, and ignore the "noise".

In hind-sight, my pulled buy-order looked OK.

Should have known the Dow traders are jelly-kneed. Must be a lot of gambling going on, with leverage and lots of over-exposure, for the market to be so nervous. 8 weeks ago, oil price rises came and went, and no one gave a toss.

But then, we didn't have Bernanke, and we still have Bush!

Keep Smiling

Trading style :CFD's predominantly long term.

tryhay

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Post Number: 1130
Registered: 09-2005

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Monday, August 18, 2008 - 10:05 pm:

LNN seems to have been off the radar lately ~ it is another trading under the 200 D_MA & seems to have fallen out of a pointy triangle. Keeps coming up on short scans...

LNN Daily: Not looking healthy (some negative divergence) but I don't yet trust it to short...

lnn