TUESDAY/TOMORROW IS LAST DAY TO BUY "FUN" AND BE ENTITLED TO 6.5% DIVIDEND...
So Cedar Fair is going ex Friday, so in order for anyone to receive the 6.5% dividend is tomorrow/Tuesday. I will bet anything that FUN sells off tomorrow and even more on Wednesday and Thursday. I SEE A NICE BIG FAT 10% SELLOFF IN CEDAR FAIR INTO THE 34 TO 35.35 RANGE IN THE NEXT 5 TO 10 DAYS. There are just way too many people jumping on stocks with dividends that offer little to no growth. Those that recently bought this stock should sell now, because you are about to lose alot of money on this stock FAST. THE CEO ONLY BUYS SHARES ON BIG PULLBACKS SO DON'T EXPECT HIM TO BAIL YOU OUR ANY TIME SOON. SO WHEN YOU SEE THE STOCK IN THE LOWER $30.00 RANGE, THEN EXPECT MATTEW OUIMET, THE CEO OF CEDAR FAIR (FUN) TO STEP IN AND BUY ON THE CHEAP ... BUT FOR ANYONE WHO BOUGHT IN THE MID TO UPPER $30s, YOU WILL LOSE ALL THE WAY AROUND, INCLUDING THAT JUICEY 6.5% DIVIDEND. CEOs don't care if their stock goes up or not, just that they themselves make money on their investment in their stock.
Okay, time to fact-check again. First, you don't get 6.5% tomorrow. It's a quarterly distribution. So, you get 1.625% now, and need to hold on for the rest of the year to get 6.5%. So why again would you sell, if you are looking for yield?
And, again, if you're looking for yield, why would you be sad if FUN dropped to 34? Why, then the yield jumps to 7.3%! Time to buy!
A much more compelling case can be made looking at the senior unsecured debt, which sold at 5.25% yield. The good news is that it sold without a discount, so there is plenty of demand for companies like FUN. The real question is what kind of risk premium do you want for holding equity in the same company? Right now it's just about 1.25%. Is that enough for you, or not?
My friend, tomorrow this stock's price will do all the talking for me. Expect a drop tomorrow and through Friday that exceeds the $62 dividend that you are waiting for. The CEO will make money because he bought the stock when it was in the low $30s, and with his prior pay in options no doubt, his cost average in easilly below $27. BUT ANYONE BUYING CEDAR FAIR AT THE CURRENT PRICE OF $38.66 WILL LOSE MONEY, NOT MAKE MONEY. So lets see if I turn out to be right in the next 10 days. GET READY TO BUY ON THE DIP IF YOU'RE IN LOVE WITH THIS ONE, BECAUSE IT'S ABOUT TO DIP LIKE THE ROLLER COASTER FROM HELL. AND, YOU KNOW IT!!!