JayBanks wrote:
Kylemcc10 wrote: Where on earth are you getting $89 from. The total dividend amount has already been released just do the math on shares outstanding for a ballpark. Updated yield will be over 12% maybe even higher. It's always a generous payout based on the share price. Average down if need be and collect cash for many many years. You're really over thinking this.
I'm taking the 5 year average yeild of 9.4 and using it a base of what the normal share price is vs the dividend at payout and dividing it from what the forward looking dividend total appears to be as an estimation of share price valuation that has been shown to be the past standard, which shows if the share price is within normal valuations on payout periods:
Based on 2.10 per quarter = 8.40 per year / .094 = 89.36
I acknowledged that dividend is over reaching on a full year, but I was responding to someone who was discussing a forward yeild of 22% over a full year.
There are issues with using that math alone, but it's a pretty decent standerd to give you an idea of how far shareprice is off recent historical averages.
I can also use it anouther way against the current share price to see what the yearly dividend expected by the market is:
37.40 x .094 = 3.515
This suggests that according to those historical averages the market price suggests the market is expecting 3.51/year in payouts which is lower than even the possible current dividend expectations showing that even if we expect $1/quarter payout going forward as the bottom, the current share price is undervalued. But this year is also a very large outlier on payouts and it should not be expected to continue unless your also to assume this outlier becomes the norm.
Because both of these are showing large differences to the historical norms and current realities it shows there is a large amount of risk or reward possible here depending on what your thoughts are going forward.
If your not looking at your investing your money with targets, goals, expectations or an overall rounded plan your underthinking your investments. The maths I'm projecting should not be a full base of an investment thesis, but they give an idea of where the market is pricing things and where they normally trend which you should be aware of if you have a defined investment plan, otherwise your gambling rather than investing.
I myself am willing to give up upside potential and wait until I see and understand what the downside is and what the reaction will be to the actual announcement.
The 'Ballpark' number isn't what goes into my wallet, the actual announced number is, and the market likely will react more to the definitive announced number rather that the income recipt number as the company can decide how much they wish to move on that number. I have 2 other royalty plays that are trading very different ways in payout ratios to their recipt incomes so while as that income number does give an indication, it can make for good or bad surprises on the dividend announcement. Because this is a variable dividend that can be a rather large swing and you have to be fine with that possible wild ride.
Averaging down is excellent if you feel the market is undervaluing the asset when you've already made your initial investment. But if I'm not yet in and I'm already thinking about averaging down aren't I awknowleging my possible current entrance price might be too high and that I might be wrong with a plan for the investment. Why wouldn't I wait until I'm confident and comfortable with my thesis that it will succeed upward, even if I have to give up some upside to be pleased with my investment. And why should I possibly wait years before my total return on an investment is in the black, that's stupidity.
I've made my mistakes in the past catching falling knives specifically in the commodity industry, and with other companies while overlooking information, being drunk on the hype of overstated metrics and ignoring red flags. I'd like to hope I've learned from those mistakes, some of which I'm still in the red over or have achieved far less returns than I expected upon investment. For the most part I've been succeeding if not beating my expectations the last several years using my experience of learning the hard lessons years ago which reinforces the methods, deep dives and overthinking I currently do before I risk my capital. I can still be wrong when I finally deploy my capital, but it's much easier to live with when I tried to be correct and in all likely hood my downside is likely more limited to within my comfort zone. I do gamble a bit with penny stocks for short term plays after I've done my due diligence on what I'm willing to risk, the company and have a plan for those plays, but I like to think if I'm laying down a long term investment of an amount that is significant to me that I have looked at everything that makes me sleep well.
Back to LIF specifically, I am interested as stated before, and the current price does not bother me that much as I do feel the price has room to run, not as far up as the $89 I calculated above, but I also don't see this see this being a 22% or even 12% yielder for long going forward as it would be expected we would move back towards the norm with the share price rising or that the current pricing cycle will dissipate and we will see more tame income/distributions or a combination of the 2 factors. I'm not confident that the current 20-25% pull back from the highs is all that this will recede short term and I'm leaning more towards a better entry coming along in the short term, than this will stay flat/move upward. I'll happily pay more later if I'm wrong, but I would like to be confident I'm making the right decision with an 'in black' future and it's not as easy to make that decision as people on here imply with statements of just '22% forward yeild bought today' or 'just average down if it goes down'
I do enjoy having these discussions and hearing what other people are looking at that I may not be, so by all means throw some more information/analysis out there for the community to look at.