RE:RE:RE:RE:RE:RE:New 52 week high
Thanks, oldtimer21. You've nailed it.
A common misconception with COS today is that they are "borrowing to cover the dividend"
This assumption is usually made by analysts or experts who do not take into consideration COS's capex financing strategy.
Rather than suggesting the company is borrowing to pay the dividend, we could suggest that the dividend and maintenance are covered by cash-flow and that the company is borrowing for capex.
Too many people feel that capex and maintenance are the same expense.
When capex is complete and commodity prices and production rates cooperate, COS is going to look much sexier to institutional money managers. Based on the recent share price activity, larger investors are already starting to move into the stock in anticipation of dividend growth and share price appreciation.
Something else rarely discussed is the overhang from Newmont's share offering last summer. It can take some time to digest $600mm worth of shares that have underperformed for 3+ years! As the market digests the offering, the shares tend to move into stronger and stronger hands. Get enough long-term investors and some good production results and you'll have a recipe for another rally to higher levels.
As Egyptian points out, $30 is not an unreasonable target but I feel it will take us some time to get there. As we wait, we can enjoy the devilish dividends that the company "borrows" to pay for.