TOL
I have always thought my investments in TOL had been disappointments. Why? Because I sold them off at a very handsome profit but the share price has never recovered to more than AUD$20 each.
Subsequently, I was handed TOL shares via the takeover of PRK (Patrick Corp). I thought it has been miserable but in fact, I forgot that PRK tripled its shares (1 share became 3 shares in 2004). Hence, I should not take $14.77 per share but 1/3rd of that, ie. $4.93 each. When TOL took it over, it also gave $3 cash per PRK share plus 0.4 TOL share. Hence the real price was only $1.93 and today, Japan Post lobbed a takeover bid for TOL at $9.04. So on top of dividends, I have made more than 4 times the investment in PRK.
I did think about buying more TOL shares recently purely for its yield but the parcel is held not in my super fund so the franked dividends are not as appealing.
posted by Club Mulgoa @ 2:14 AM
1 Comments:
Japan Post is offering $9.04 per TOL share and TOL shareholders are eligible for a 13c dividend on 4/3/15. That means it is worth $9.17 per TOL share. Yet, the market has priced it at $8.92 this morning, a discount of 25c per share. At today's interest rate, it is less than 2% so this is better than putting cash into the bank if the whole thing is over within 6 months.
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