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Soup Restaurant's share price has been bumped up by the special dividend declared recently. This is good news for shareholders, whether they were hoping for capital appreciation or to collect more dividend.
However, once the counter goes XD on 7th May, we could see share price weakening significantly if Mr. Market wakes up to the fact that this stock has become relatively expensive with EPS being much lower without contributions from Dian Xiao Er.
So, bearing in mind my motivation for being vested in Soup Restaurant in the first instance, divesting my stake now makes sense as the difference between the sell price and my buy price is more than the dividend of 1.15c to be paid out. Add the two rounds of dividends I received before, the ROI over the last one year looks pretty decent.
I now retain a very small long position which is, in essence, free of cost. This means that I get to keep my shareholder's card and I will still get a 15% discount at all Soup Restaurant outlets. After all, I still visit them regularly since I like the food they serve.
Have my soup and drink it as well? Why not?
Related posts:
1. Soup Restaurant: Special dividend declared.
2. Soup Restaurant: Gain of $7.7m.
3. Tea with AK71: Soup Restaurant's S-Card.
Bloggy Award
3 comments:
New category of investing - pragmatic investing. Beside dividend an capital appreciation, discount card collection can be a reason to invest in F&B counter. Bread talk should take a leaf off from soup kitchen LoL
Hi seefei,
Being pragmatic is probably the best approach to anything in life, including investing. ;p
Soup Restaurant Group has discovered $1.05m in irregular transactions between 2004 and 2013. Investigations found that these involved documents forged by a senior manager whose services have since been terminated.
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