Lewis Group is a South African Furniture and electronic appliances retailer.
They have declared a R1.95 dividend (R1.56 net) per share, which is to be paid on the 20th of July, 2021.
From 21st of July they will be ex dividend, which could put pressure on the share price in the short term, however, the share has been falling since its last rally where we see that massive spike in price. So, there could be an opportunity here to purchase shares at a lower price 'cum' dividend. You need to manage risk and decide on your risk-reward ratio.
Bad trade = loss of capital regardless of dividends. (stop loss)
Good trade = Profit from dividends and sell out breakeven
Excellent trade = Dividends + capital appreciation.
Those willing to manage risk can benefit from a dividend payment and potentially capital appreciation too, however, you'd need to manage risk because their is a great chance of the share falling further and moving against your trade.
Chasing the dividend payment, might be worth it because the companies fundamentals are sound and they are currently undervalued - IMO.
I've entered 50% of my capital at a purchase price of R30.12, I'll be watching the trade over the following month, ready to deploy the next 50% if the price drops further.
My stop loss is at R28 and my take profit will be at R34.
Risk= 7% loss
Reward = (dividends) + 12.8% in capital appreciation.
For me the rewards outweighs the risks.
They have declared a R1.95 dividend (R1.56 net) per share, which is to be paid on the 20th of July, 2021.
From 21st of July they will be ex dividend, which could put pressure on the share price in the short term, however, the share has been falling since its last rally where we see that massive spike in price. So, there could be an opportunity here to purchase shares at a lower price 'cum' dividend. You need to manage risk and decide on your risk-reward ratio.
Bad trade = loss of capital regardless of dividends. (stop loss)
Good trade = Profit from dividends and sell out breakeven
Excellent trade = Dividends + capital appreciation.
Those willing to manage risk can benefit from a dividend payment and potentially capital appreciation too, however, you'd need to manage risk because their is a great chance of the share falling further and moving against your trade.
Chasing the dividend payment, might be worth it because the companies fundamentals are sound and they are currently undervalued - IMO.
I've entered 50% of my capital at a purchase price of R30.12, I'll be watching the trade over the following month, ready to deploy the next 50% if the price drops further.
My stop loss is at R28 and my take profit will be at R34.
Risk= 7% loss
Reward = (dividends) + 12.8% in capital appreciation.
For me the rewards outweighs the risks.
