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Companhia Energética de Minas Gerais S.A. Message Board

  • gmmcdon42 gmmcdon42 Aug 17, 2013 12:53 PM Flag

    Dividends & stock price headed lower......................

    This projection has less to do with the performance of the company and more to do with the declining value of the Real vs the dollar. Between last Monday and Friday the value of the Real dropped 5% and the stock dropped 8.9%. On Friday alone the Real dropped 2% and the stock dropped 3.2% setting a new annual low. As interest rates rise in the US the dollar will continue to rise. And if The Fed actually does start reducing their purchases of US debt interest rates will shoot up and ravage the value of the Real. The return on equity and dividend already announced to be paid in Dec. will surely be less than the $.627 paid in June in the absense of an extraordinary dividend. The stock is reacting to the devaluation of the Real. The next stop for this stock is $7.80, then $7.40 and so on until the Real reaches some equalibrium with the dollar. I will not be making any further purchases until I see what Jan. brings

    Sentiment: Hold

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