Old post on Vicom in March 2015
The trading idea was
"I think the current spike is due to the special dividend of 9.5 cents.
Chances are this is setting up the share for a steep fall once it reaches ex-dividend.
The share price is trading at 6.55 as of this post.
My estimate is that it will trade to below 5.8 when it goes ex-dividend.
That should set up a good long term buying opportunity.
The way to evaluate this would be
a) Does Vicom trade to below 5.8 SGD from now till Dec 2015?
b) A year from now, assuming one buy below 5.8 SGD and holds it till ex-dividend date of 15 August 2016, what is the return one has made?"
It is time to answer part (a).
Vicom traded below 5.8 SGD by August 2015.
In fact, right now it is close to revisiting the lows of August 2015.
The question now is, will it do a run up till August 2016?
This right now is very attractive as a risk return, so, if we buy now below 5.8 and hold it for its run-up, it might be worth it. Even, in case it does not run up, the risk of falling below 5.5 is very low, so it is a low risk investment opportunity.
As is normal, let us wait till August 2016 is over before we examine whether the return estimate of 30% holds.
Disclosure : Neither long nor short, currently, likely to go long in case share price falls below 5.8 SGD.
I am not an investment professional.
I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.
Nothing written here is an invitation to buy or sell any particular stock.
At most, I am handing out an educated guess as to what the markets may do.
The market will always find a new way to make a fool out of me (and maybe, even you!).
Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.
I am not immune to that, so please understand that any past success of mine will probably be followed by failures