Saturday, November 5, 2016

Books on Books on Dividends

Barnes and Noble  [BKS]

     Here's a store that a lot of people probably haven't been inside in years. I only go there because that's where I have to go to get my textbooks. However, I have been keeping up with this company for the last year or so and am just now writing about it because I actually forgot about it for a while. I remembered it today during class, took a look and it was up 6%! Fancy that! As per usual, I'm going to go through some of the reasons why I like this particular stock.

     ONE:  The dividend yield and this bad boy is crazy. Google finance has it posted as almost 6%. That's really, really high compared to most other stocks. Normally I like looking at growth stocks where dividends aren't really a thing.
They are focused on delivering company growth for their shareholders instead of obtaining cash flow to disperse as dividends. Barnes and Noble had dividends payed out form 2005 thru 2010 and then stopped. They have now paid a dividend for the past 6 quarters averaging around 5.00% yield. So it isn't a sure thing that the dividend will continue to last. They initiated their dividend payment when the stock price was about $26 dollars. It closed Friday at $9.65. It is entirely possible that they decide to lower or discontinue their dividend in the future. But, to put that percentage into perspective....if you invest $100 into BKS at $10 a share then you'd make $6 dollars a year based on $0.15 cent dividends. Pretty cool if you ask me. And that's assuming there is no capital gain which brings me to my next points.

     TWO: The stock price candlestick chart shows that it just recently fell below the 50 day moving average line. Looking at the chart, it looks like the price has been bumping right around the line and using it as support, and then resistance.
It is very possible that the stock can gain a little traction and then hit the 50MA and come back down. OR it could hop up over the moving average and use that as a support line for the future. It's just speculation at this point so there isn't much more to say about it. Just have to keep an eye on it and see what happens in the future days and weeks. 
     [Picture] The hammer is a bullish indicator and the hanging man is a bearish one.

     THREE:  The stochastic is lookin really nice. It's very, very low and there is a ton of room for growth. The black line just curled up the red this week and is touching it. That can support a breakout as easily as it can bounce off and continue lower. However, in the past when it has dropped below the 20 line, it has supported a pretty hefty breakout. I'll continue to watch the chart and see if the MACD starts to look a little better as well.

The blue line is the 50 day moving average. Another thing to keep an eye on is if the 50 day ever crosses above the 200 day. That's a really bullish sign as well. It doesn't look like it will happen in the next week or even two, but it's just a thought.

     Sure,  this isn't the most appealing stock at the moment. But I like barnes and noble, I like to read, and I like the potential of this stock. Let me know what you think. Comment, or share with your friends! 

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