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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (27253)7/27/2007 11:34:02 AM
From: SI Bob  Read Replies (1) of 78744
 
Liking WPL quite a bit more at this level. Trading at about $10.90, which gives a 5.5% dividend yield. It previously bottomed out (and stayed there for a long time) at just over a 6% yield.

I would expect that the short position isn't quite as large now, so not as much fuel there, but it should still be sizable. There were 2 or 3 days where trading in the last half hour looked like it could've been short covering, but not enough total volume to have made a huge dent in the short position.

One of the things I like most about this company (aside from so much of it being held by Van Den Berg) is that the 15 cent per quarter dividend only applies to the first 3 quarters. 4th quarter dividend is a surprise, and I think the 15-cent dividend is sand-bagged enough that 4th quarter dividend should be a positive surprise rather than negative.

On the flip side, the few analysts who cover it hate it. Consensus target is in the $7's and on the 1-5 buy-sell scale, it's more biased toward sell than any stock I watch, at about 4.2.

The analysts obviously don't expect the dividend (already cut) to hold, as the target price gives an 8.2% yield.

I'm really sitting on the fence as to whether I think the analysts' hatred of the stock is a good or bad thing, but am betting lightly in the trade accounts (heavily in the LT account) that it's a good thing.
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