RE:Capital Gains Inclusion Raised in the Budget.You're right, Quint. And, yeah, if I ever decide to sell down my position (not at all likely in the near term), I'll have to stagger it across a few tax years for sure.
But I'm sure my stake pales in comparison to the big boys lol. I even own a bit of ARX indirectly through ENCC, which is geared for income but it's admittedly a relatively small position.
This one has always been my single largest position. I started looking at O&G names in late 2017 and It just worked out that way that ARX was the one I dug deep on to average down through the Covid lows. And despite some tougher years where we definitely weren't feeling the market love, I have no regrets.
You make a really good point about this tax change impacting the way companies view shareholder returns. I've said it before... it's time for a dividend increase and maybe this gives them a slight push to sweeten the pot.
Time will tell and I'm going on the record to predict an increase when they announce Q1 earnings next month. I'll be surprised if they don't but I won't shed any tears either if that's the case.
And I'm in agreement about the longevity of some of these government policy changes. I try not to get political but they're driving smart money out of the country while creating a nanny state with unsustainable spending. Something has got to give.
Cheers and GLTA ARX bulls!
Quintessential1 wrote: Well trapped if we were worried about the tax man before, we should be downright sweating now! LOL
I am wondering if it will affect ARX's returns to shareholder policies.
Creating growth by increasing share value could end up shooting large shareholders in the foot if they don't or can't sell in tranches that generate less than $250,000 in capital gains.
Are increased dividends the best way to extract returns now?
If you made a double on ARX share price, bought in at $12.50 ish per share, you would have to sell 20 000 shares per year to trigger the increased inclusion rate. I am not sure I would want a 10 000 share sale included in my tax calculations so unless I had to, I probably would not sell.
Another way of looking at it is maybe the Government just disincentivized large sell offs and associated volatility if you are looking for any upside and I agree, there is very little upside.
The good news is the new tax is probably as temporary as the existing administration and probably ousted with them and the 2% buyback tax one year or so from now.
But will ARX management wait for that to happen to adjust? Will they adjust?
As he who shall not be named likes to remind us management do not own a lot of shares. Certainly more than me but probably less than Trapped! ;-)
Good first world problems for us to have.
GLTA ARX BULLS