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Aqua America Inc. Message Board

  • taught_to_question taught_to_question Oct 20, 2009 12:40 PM Flag

    please don't be a sucker like I was

    Another recent thread on this board touts a DRIP as a failsafe way of profitably investing in Aqua America. Given the Pollyanna nature of that thread, I wonder if a company employee wasn't responsible for posting it in an effort to sucker more people into buying. But I digress...

    Nearly 5 years ago I started a DRIP with Aqua America. It was through Equiserve, which later became Computershare. The DRIP's purpose was to provide my son with additional funds for a down payment when he bought his first house. He's now doing that, so let's do a reality check on whether I did him any favors.

    With Aqua America's further drop today, the DRIP investment has lost 29% of its value. This is even in spite of the increased share purchases made possible as the pps has dropped and the dividend has risen. Sobering, but that's not all.

    The actual loss on this investment if liquidated today is actually over 30%. This is due to back-end fees of a flat $15 to liquidate, plus the .15 charge per share at sale time. That's a hefty back-end load!

    Please, please, if you are considering a DRIP with Aqua America, run, don't walk, in the other direction. You'll do much better by simply putting your face amount into a CD, even with rates as low as they are now.

    Now, some silly person may respond to this post by lamenting my lack of timing. So just in case, I'll respond right here: You don't think that in nearly 5 years the "timing" issue would have become moot? Just how many decades would I have had to hold this investment to get back to breakeven?

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    • Thanks for your honesty. It's hard to come by on these boards.

    • Talk about spooky! Less than 24 hours after you posted your thoughts about a CD being a better investment, Cramer says exactly the same on Lightning Round! Unbelievable!

    • Excellent post!
      I wrote here about my experience with various DRIPs, and what I've learned from long conversations with brokers and account reps. That opened my eyes, and we exited almost all DRIPs that we had (more than 20 at one time).

      Most of you probably receive some promotional email "teasers" about FREE shares you are entitled to. Yes, they talk about DRIPs. The author of the original post is right - the fees are killing these types of investments. I described my experience selling a fractional share of Intel long time ago - it was a real shoker. Fees on fees, charges on charges, commissions on commissions....
      It may be not so huge if you pay 15 cents/share of $100/sh stock but with current price of WTR in the $15th - it is a robbery.

    • You are a MORON!!! Thanks for the gigantic BUY SIGNAL strapper. This is going directly to 20.


    • I pulled up a chart,

      Nov 2003 pps was 16.24

      Nov 2004 pps was 17.79

      Nov 2005 pps was 16.23

      Dec 2005 split 4/3

      Todays close pps 16.24

      If you bought around five years ago,you rode it all the way up,and right back down.At some point you had a very healthy return, Been there, done that,shoulda,coulda,didn't .

    • As a comparison

      '95 bought 500 @2.90 sh.
      '96 split 3/2
      '98 split 4/3
      '00 split 5/4
      '01 split 5/4
      '03 split 5/4
      '05 split 4/3
      plus re-invested all divys

      You can clearly see I was very fortunate to get in when I did.So we have 2 scenarios of buy and hold.And will continue to hold,I think we have come close to the bottom.

      Since the float of shares are owned:

      6% by insiders

      44% by mutuals/other funds

      50% by individual accounts

      One in every twelve shares are short, (1/12)very large short position,my take is the little guy will capitulate before anybody else , plus with so many drip accts,and the economy in the crapper,that drip acct is very easily tapped for cash,and the shorts know it.
      Ain't no employee,just an investor,trying to buy low,sell high.
      Wtr is a no brainer,it's a utility,ylding over 3%,and fits well in an ira.

    • Today I learned that the cashout value of my son's and my joint DRIP with Aqua America was 33.7% less than the $$ amount invested. As one responder to my thread opener echoed, we would have been much better off just putting the $$ in a low-yielding CD. The question continues to be "Why?"

      I pulled up my account records on WTR and saw that my first purchase on 3/8/05 was at 17.34 per share. On 9/13/05 I paid 25.10 per share. On 11/8/05 the pps I paid was 23.06, quite at variance with the responder here who claims the pps in 11/05 was down in the teens. All these prices are dividend & split adjusted. They are a matter of historical record.

      Moron? Yes, I certainly was. As I counseled at the beginning of this thread, if you are considering a DRIP in Aqua America, you should run, not walk, in the opposite direction. Because 5 years from now, the poster who cited a 3-5 year span will be advising that this stock needs an 8-13 year span to be profitable. Again, the question is "Why?"

      Those who face facts aren't going to like the answer they get.

      'Bye, everybody.

    • I agree, I held this too long and it sucks, you won't get paid for holding this one!

    • I agree. I started in September 2003 with DRIP and dollar averaging at $125/month until April 2008. So with all the deposits and drips the value of the stock is up 5% after six years. I figured if I dollar averaged into lowly CD's i would be about $5,000 higher than I am now.

      I stopped dollar averaging because I was buying high and it would continue to drift down over the long haul never rising enough for dollar averaging to make sense. I stay on the drip because it would cost too much to sell right now and I don't need the money at this time.

      If you are thinking of starting out with this stock I would move on.

    • Let me get this straight - you're a "Sucker" when it comes to investments. And you want others to follow your strategy of basing investments solely on the basis of the past 4 years like in 2005 and now in 2009.
      It's painful to loss capital but it's worse to do it twice by ignoring PE, Yield, Div, Risk or Taxes of competing investment choices.

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