OTCPK:JENGQ - Post by User
Post by
SlickRick40on Jun 03, 2014 3:45pm
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Post# 22626317
YIELD HOGS ready yourselves for THE SLAUGHTER
YIELD HOGS ready yourselves for THE SLAUGHTER
Globe says another dividend cut possible at Just Energy
2014-05-28 08:17 ET - In the News
The Globe and Mail reports in its Wednesday, May 28, edition that an investor bought Just Energy Group ($6.37) in December, 2013, "for the high yield," which at the time was about 11 per cent. The Globe's John Heinzl writes in the Yield Hog column that the lofty yield apparently did not faze this investor, but it should have. Mr. Heinzl notes that stocks with with supersized yields often come with supersized risk. On May 15, citing the impact of severe winter weather, Just Energy announced results below expectations for the fiscal fourth quarter ended March 31. The company's guidance for the current year also disappointed analysts. As a result, analysts cut their price targets on the stock. As investors rushed to the exits, over the next five days the shares skidded about 27 per cent. Mr. Heinzl notes that it is not the first time investors have been seduced by the supposedly free lunch of a fat dividend -- with unpleasant results. With Just Energy's shares now yielding more than 13 per cent, the market is clearly signalling that it expects a second dividend reduction following last year's 32-per-cent cut. Chief executive chairman Rebecca MacDonald has not ruled out such action.