What to do with Firm Capital going forward? So coming up to the end of the year and watching earnings is getting me to reassess positions in my portfolio, FC has been on my mind the past few days as an investment that might be worth moving out of for myself. To date I've gotten a 45% overall gain on paper in just under a year and half of owning it but I feel it's future is capped from what I'm seeing currently.
Several months ago, me and anouther poster discussed his buying a couple months before Covid after a special dividend was paid out, the same situation is forming now 2 years later and seeing the signs, I'd rather not make a similar mistake, tho this one is not a purchase, but more a booking of gains with and exit before a breakdown.
I don't know how many people monitor this board, but I would like to stir up some conversation and get some information out there for the gang and maybe influence my current thoughts.
So here's what I've been looking at:
This Stock acts like a high yeild bond - Since June 2007 the payout has stayed constant at 7.8 cents/month except for the special payouts in December most years, and it seems like the most we are getting in the specials are 3-8 cents.
We have been maintaining in all time high areas with no signs of a breakout coming - in the past this usually means there is a breakdown lower before anouther move higher, this likely means there's a better buy in point coming with some price appreciation afterwards from looking at historical charts.
It seems that usually the price spikes late December into January - likely due to the special dividend announcement and delivery.
In forecasting regular growth it seems to be degrading - from late Jan 2014 - early Feb 2020 the stock price gained 29% in 6 years = 4.83% per year or 79.86% all in = 13.31% per year which seems nice over the long term, but Highs to High the growth is less and the dividend additions are less of an influence with the price rising. Nov 17th 2014 - Feb 20th 2017 = 11.69% growth per year all in, Feb 20th 2017 - Feb 3rd 2020 = 9.27% per year all in. Those are retreating gain rates, with longer ranges between highs that makes me wonder if the next peak will be 4 years down the road and only 8% gains all year over year?
Those 4 points make me feel that it might be worth it to exit after I book the special in December - early January and look for better growth prospects else where as the current 6.8% yeild can be found in a few places now and I can find mildly lower dividends that grow 5-10% pre year that go along with better price gains.
I still think this is an extremely healthy company that is super attractive for investors looking for steady income, but as someone with a longer timeline, looking else where until atleast anouther pullback happens might be the best course. If management showed an interest in increasing the dividend I may be interested to stick around longer.
Please jump in and throw out other things I should look at within the company or that may help me confirm my plan or help other readers.