Paper company stocks are trading on sidelines for last couple of days and also volume is low. One of my favorite paper company stock is Star Paper Mills Ltd currently trading in the range of Rs 25-26. It should be a good buy below Rs 22 a share. Below shown is pattern for the last 20 trading sessions.
Dividend History over a year for Star Paper Mills Ltd. (BSE:516022):
| Date | Dividend (Rs.) | Yield(%) |
|---|---|---|
| 2011-09-20 | 0.50 | 2.27 % |
| 2010-09-08 | 0.75 | 1.92 % |
Can you believe, Five hundred and seventy six (576) out of 3,000+ companies from India (Bombay Stock Exchange-BSE) gave dividends last month i.e. September 2011. List start with the companies with dividend yield more than 9%. During economic crisis these dividend really help in maintaining a investment cushion. Click here for Indian companies Dividend Dashboard 2010- 2011.
Dividends in the Month of ”Sep, 2011” from Bombay Stock Exchange :
| Script Code | Company Name | Sector | Dividend (Rs.) | Yield (%) | Date |
|---|---|---|---|---|---|
| 511571 | Som Datt Finance Corporation Ltd. | Finance | 1.00 | 12.5 | 2011-09-07 |
| 511066 | Sakthi Finance Ltd. | Finance | 1.00 | 9.25 | 2011-09-19 |
| 521064 | Abhishek Industries Ltd. | Textile | 1.20 | 9.09 | 2011-09-22 |
Last year in 2010, we had 454 companies with dividends in the same month of September.
Dividends in the Month of ”Sep, 2010” from Bombay Stock Exchange :
| Script Code | Company Name | Sector | Dividend (Rs.) | Yield (%) | Date |
|---|---|---|---|---|---|
| 590066 | Kcp Ltd | 2.50 | 7.76 | 2010-09-02 | |
| 530719 | Ikf Finance | 1.00 | 6.45 | 2010-09-23 | |
| 531404 | Zicom Electr | 5.00 | 5.79 | 2010-09-23 |
James River Coal Company (JRCC) is one of the coal companies in US and it mines, processes and sells bituminuos, steam and industrial grade coal through multiple subsidaries.
Its peer companies are Peabody Energy Corporation (BTU), Alpha Natural Resources(MEE), Arch Coal Inc (ARC) and Patriot Coal Company (PCX).
In genral all these coal companies have witnessed a significant decline in last 3 months. On July 26th 2011, JRCC was trading above $20 per share after hitting its 52 week high of $27.05 on Jan 12th, 2011. The current price is between $5 and $6 and still heading downwards.
Correlation Effect:
I see a strong correlation between Oil industry and Coal industry; below graph is between JRCC and the electronically traded fund (ETF) – Direxion Daily Energy Bull 3X Shares (NYSE: ERX). ETF of oil is good reflection of oil price history and the oil sector companies.
In last 3 months (Jul’11 through Oct 3rd,11), both the stocks ERX and JRCC lost their stock price more than 60%. [Below graphs are taken from www.google.com/finance]
As seen in above chart, whenever oil ETF fell, JRCC followed the similar pattern. Now interesting correlation between Oil industry and the Finance Industry. Considering the news on Greece to get into credit default; finance industry across the world is taking a nose dip in stock price. I consider ETF- Direxion Daily Finance. Bull 3X Shares (NYSE: FAS) as a index to measure finance sector stock price movement.
ERX and FAS - 6 months (Apr-Oct 2011) stock price chart
Both the stocks i.e. ERX and FAS dropped their stock price by more than 68% in last 6 months as shown above.
Bottom line- As long as Greece issue stays in the stock market cloud, financial stocks will continue to get hammered and now China’s slow growth is also getting into the mix of economy slowdown. And as we saw in the graphs, weak financial sector will keep the Oil sector also down and hence the coal sector. Because when oil get cheaper, consumer by oil then the coal and that triggers low demand for coal and hence drop in the stock price.
There are couple of questions unanswered for stock market decline in last 3 months, things were good, at least were not bad. Latest earnings from leading international banks were good, all other sectors were forecasting second half of 2011 equally better. But suddenly Greece default case erupted and rest is history. I wouldn’t call my self as expert as people on wall street but still I had kept my Return of Investment better than leading stock Index i.e. DJIA, S&P500. If I look at the history on investment portfolio for the last 1 year; I had been in better position but then took nose dive.
Thanks to wikinvest.com to put things on perspective, above graph is taken from my investment portfolio; its one of the free services provided by wikinvest. I connected my stock brokerage accounts with wikinvest to keep track of portifolio at one place.
In last 3 months, My portfolio lost more than 50% of its value. I totally don’t understand; Why Arcelor Mittal (MT) going down if Greece has issues or even Japan had nuclear plant disaster due to some flood. Why Coal industry is going down? Why Automobile industry going down when gas price goes down; isn’t Automobile industry should go up when gas prices are going down because people can afford to drive more and more on the same gas budget. May be I am the only who is not getting it at all…
Arcelor Mittal (MT) one of my favorite stocks, had BV per share (MRQ) = $40.42 with 2.82% dividend yield when I bought it first at $25 per share. I felt it was at great price to pick it. Few days later MT fell to $18 a share that increased dividend yield to 4.1% so I acquired some more shares to bring my average cost price down. Eventually I acquired another handful lot of shares at $16.8 a share with dividend yield of 4.4%; of-course considering the fact that MT will sustain the dividend at $0.75 annually (0.1875 paid per quarter). But now here comes the stop sign, being a retail investor, you can put in only so much cash on the investment. So I have average of $18.98 per share and a yield stands at 3.95% (better than most of the bank’s fixed deposit interest rate). Sad part is that stock continued to drop and its trading at $15 range. Fundamentally nothing changed at the company, MT is still bullish on the growth in India/Brazil and no signs of production cut (per news). Back in 2008, this stock fell from record high of $103 to $17.8 (November 21,2008) and it recovered back to $48.9 (Jan 08, 2010) and then traded with in the range of $31- $38 in 2011 till June before it started a free fall to current levels of $15. Year 2008 and 2009 was considered a fear full great recession, isn’t current stock price of such a big company reflect we are in recession again on ground. My portfolio says, Yes!
Please share your thoughts and do reply below. Thanks