JayBanks wrote:
Dadsaid2 wrote: The market can be a pretty mean place but l cant believe cutting div to 50 from 1.15 would cause a $8-9 drop on a$50 share. There must be more. Im thinking Russia China syndrome. The market hates uncertainty so does the west start on China and they go elsewhere for iron? Glad lm not holding LIF rite now. GLTA
You don't believe cutting a dividend over 50% would lead to a nearly 20% price decline on a name that people are mostly in for income generation?
This dividend is cut not capital preservation for the safety of a the company, LIF and associates are fine and stable. This cut is a math problem income vs payouts were not sustainably inline somewhere. I don't quite know where, hopefully the conference call sheds some light, but the large payouts did not seem like they were reasonable long term.
Like you I'm not holding, but very interested in it, but I think today was just the beginning.. $30ish or less would not surprise me by end of the week. It's likely gonna be less violent but this is likely to continue down before forming a new bottom range.
DaveInvestor59 wrote: Those idiots in Labrador management, what did they think investors would do cutting the dividend of a "royalty" company by more than 50% during an environment such as this where iron ore prices are going up. Whoever made this decision should be terminated. I'd gladly do it since I've lost 20% of my capital today.
Do you think they did not see this coming to a head? I bet they couldn't believe when price disconnected from reality a year ago. They just did what every investor wants and retuned large amount of capital to shareholders and should be applauded for that, but now that period of such large payouts seems over.
For those that were chasing payouts and yield all the way up and thought it was going to be sustainable, they are the idiots.
There were signs that this was coming, I was one looking at jumping in around Dec-Jan but I wasn't comfortable with historical and current value vs the price action vs outlook, so I've sat this out waiting for things to align better. Now the payout seems more rational and now I'll wait to see the price and value make sense with it.
With Iron Ore's price still pretty high, the producers and movers are likely still going to be good plays, just this royalty got disconnected with the market on both payout vs actual production and payout vs investor hype.