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  • axpkocop axpkocop Apr 27, 2013 1:54 PM Flag

    Annual Returns for LO since 01/01/2009

    Note: LO was created from the old Caroline Group on 06/10/2008 at a split adjusted price of 25.54 per share. During the crash that took place in late 2008 you could have bought LO for under 19 per share as you see below.

    Year end 2008--18.78
    -------------2009--26.74 plus 42% and an additional 7% via dividend
    -------------2010--27.36 plus 2% --------------------------5% via dividend
    -------------2011--38.00 plus 39%-------------------------6% via dividend
    -------------2012--38.89 plus 2%---------------------------5% via dividend
    --------04/26/13--42.83 plus 10%-------------------------1.5% via dividend

    If you bought this stock in 2008 for under 20 you're now earning 11% on your investment through the dividend. Buy and hold works.

    Note- I also bought their bonds three years ago and the annualized return is in the 13.5% range. They mature in 7 years and have a coupon of 6.875%.

    Thank you LO.

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    • Compared to 5 year treasuries-

      What's interesting is that if you owned LO you're averaging more than 500 basis points more per year through the LO dividend than you would through owning 5 year treasuries.

      • 1 Reply to axpkocop
      • Let's say you invested $10,000 in LO in 1/2009 and paid 18.78 per share. Then I'll take the difference between T-bonds and the dividend and adjust the cost basis of your holding for the respective spread--
        You start with 532.48 times 18.78=$10,000

        2009--T-bonds-$172--Dividends--$681.6--Difference=$509.57--Adjusted cost basis- $9490.4
        2010--T-bonds-$265--Div--$756.12--Diff=$491.12--Adjusted cost--$8999.28
        2011--T-bonds-$202--Div--$921.12--Diff=$719.19--Adj Cost--$8280.09
        2012--T-bonds-$89--Div--$1102.23--Diff=$1013.23--Adj cost--$7266.85
        2013-T-bonds-$76--Div--$1171.46--Diff= $1095.46--Adj cost--$6171.39

        Because you invested in LO rather than treasuries you'll have an extra $3828 as of the end of 2013 and your stock as also greatly appreciated in price. Using the above formula how many years will it take to bring your cost basis down to zero?

        2014--$2.4 Div, --Difference=$1170
        2015--$2.6 Div,---Diff= $1200
        2016--$2.85 Div,--Diff= $1300
        2017--$3.1 Div,--Diff= $1400
        2018--$3.4 Div,--Diff= $1500** year 2018 is my estimate but it will depend on T-bond rates

71.400.00(0.00%)Jun 11 4:01 PMEDT