Lynn Energy was $42.57 on 11-1-12 only to drop to $38.00 showing this morning in pre-market. 8 trading days. That's over 10% in 8 trading days. What's wrong with the company? BP and Chk are holding their weight.
Is this just the big boys manipulating the stock price?
The best I can figure is that 1% of Americans own 50% of all stock. These 1% are taking their capital gains now, before potential tax increases on Capital Gains next year. The IRS requires if you sell and take a capital gain, you can't buy back for 60 days. This 60 day limit takes us into early January. So a 1% person can sell now, take the capital gains, buy back in early January, and never miss a dividend.
Nothing wrong with LINE other than a lot of people have made a lot of money and are now realizing their capital gains. LINE is up over 300% from the 2009 bottom.
This is just my humble opinion and it applies to most of the dividend plays in the market. These dividend plays are all getting hammered as people realize profits now rather than wait until next year.
Most of the equity and bonds are owned by institutions like pensions and other institutional money. Most of the wealth is managed under concepts of Modern Portfolio Theory which really does not care about dividends. This is one of the most likely reasons dividend growth companies are consistently but not always undervalued.
No question dividends stocks are richly valued. But then looks at the manipulated bond interest rates. That said for a significant number of individuals dividend taxes are going way up while 'capital gains' will likely stay lower than the top marginal rate.
Obama won and that means higher taxation, more regulation and less economic growth. Stocks as an asset class should go down.
We must have economic growth to stabilize our economy. There is no reason to believe the next four years will be batter than the last four. Maybe we will get a chance to buy defensive dividend payers with risk profiles close to inflation adjusted bonds TIPs at a nice discount.
The Producers in the MLP space should be down with the election. However regulation holds back competition and favors large MLPs with access to capital at very low rates. The cost of regulation like zero natural gas emission must be passed onto consumers in the end analysis.