I see no reason to run the stock down over 2% today when everyones knows that it will drop in price tonight because of tomorrow being ex-date. I see this happen all the time with my REITS because some people follow the sell before ex-date and rebuy after ideal that has been proven to NOT be more financially advantagous than taking the dividend but I can't imagine why this happened to KMP. Can someone enlighten me as to why this 2% drop happeed the day before ex-date?
It can be more advantageous to sell on a run up prior to the Ex date. KMP is up two standard deviations on a run up that started around $75. I am surprised that more profit taking hasn't taken place.
Unless you are a trader, in which case you would have taken your profits already, this run up has been too much too fast.
I would love to see some kind of sell off before the dividend hits my account. This is a fundamentally strong, sound company, and a buy on weakness.
A technical analylst on Fast Money just stated that KMP is not sustainable. I think he said that RSI had hit 90 at one point. EPD has the same characteristics. Just check it yourself, www.stockcharts.com I am not pitching stockcharts.com, but it is worth looking at. Both KMP and EPD are just running very hot.
I think the sale off today was just taking some profits. Tomorrow, might do very well, like $1.20 down and a further rise back up. After that, I think there will be a correction of sorts, but maybe not.
Because the folks(traders) that recently purchased this stock in the low 80's have made much more than what the dividend/distribution is, and they are satisfied with that. They are getting out since they know these types of stocks have the potential to drop 5% after the ex date. This stock, and some other MLPs have had monster runs recently, and the increase in stock price has lowered the percentage of return from the payouts.
And to add a rebuttal to your statement "I see this happen all the time with my REITS because some people follow the sell before ex-date and rebuy after ideal that has been proven to NOT be more financially advantagous than taking the dividend..." Since Aug of 2010, the date I started trading options on REITS and MLPs, and not taking dividends, I am up 400%.....I think that IS more financially advantageous........