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?
It's refreshing to read an honest post on this board. Most of the posts are from mindless pumpers who tout WTR stock as if it is one of the best stocks of all time. WTR has had its day in the sun but it is a company in serious decline.EPS just don't keep pace with revenues. I got out early in 09 at almost 20.75 per share. If you tell it like it is on this board there will be a lot of name calling but the stack performance speaks for itself. GLTU.
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.
Some are ok, I had the Duke Energy drip and it worked well. I do not remember a single fee. It is run through the company itself and not by one of these ripoff sites. I was in the WTR drip 1k a month for a year or two and maybe made 500 dollars. But the sale was 200 dollars or more in fees.
I have held WTR 1 more year then your DRIP plan. 8/03. My return without re-investing dividends was 16.52% in that 6 year period. Just sold in beginning of Oct. I got tired of seeing it go down, and moved the money to LLY. Something is not right w/WTR.
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 .
Hey,your right,that nov,05 was a typo error,but nothing else changed in that post.
You did buy at the top,rode it up and back down again.
What would have happened had you bought a house in 05,instead of saving for one with that money you invested in wtr.You would also have bought at the top,bet you would have rode that down too,right into foreclosure.
Your not a moron,your a whiner,Do you really think you are the only drip holder thats down from the top.When it hit 30,I had a ten bagger plus, without adding in the splits and divys.
So why are you holding on?
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.
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.