penny stocks in 2013
Which stock do you prefer, LH or LLY and why?
I’m trying to fine tune my investments and have some money (15,000) to invest medium term (5 yrs.). thanks!
Common Sense. Thanks for the detailed information. Very much appreciated! Basically, what I want to do is re-portion my self-directed money in my 401k. I have about 33,000 between LLY and LH, and very top heavy in LH. About 6,000 dollars in LLY and remainder in LH. So, I think I will do about $16,000 in each. Do you have any comments on that? Oh, and thank you again!!!
Five years is a long time to predict for as anything can happen. If I would be investing for that time period I would be looking for more than capital growth…I would look for a stock with dividends and a history of solid payments…even in bad times like the 2008 crash.
LLY is a company that pays a quarterly dividend of 3.62%…LH has no dividend
$53.00(let us say $50 /share for round numbers) / share and $15,000 you would be able to purchase $15,000/$50 = 300 shares
so every quarter you would make $0.49 x 300 = $147/quarter or $147 x 4 = $588.00 or for the full 5year return of $588.00 x 5 = $2940.00
I like that LLY Kept its dividend value through the crash of 2008…
However you see that the stock is follows the economy….and it is near the top of its overall range of $60.00…Is the share price going to maintain the pace from 2009 to present…Good question as historically…$60 is a Waterloo…
In capital growth the stock went from June 2003 – June 2008 or $45/share to $25/share = loss of $20/share or about a $6000 loss….June 2008 to June 2013 or $25 to $55 or a gain of $30/share or about a gain $9000 so the average for the two periods would be …. (9000 – 6000) /2 = $1500
This of course is horribly inaccurate but the fact is LLY is more volatile that LH so it gives you an idea
total return as the dividends are about the same in both cases is $2940 +1500 = $4440.00
LH has a pretty solid record dating back to 2004…when it was (OMG!) a hated penny stock LOL. Certainly not a bad longer hold from then. This stock has NO dividends so you must depend on capital growth for your money…in the last five years it gained about $40/share…if the same happen starting from now (gaining another $40/share) …at $100/share you would have $15,000/100 = 150 shares x $40/share = $6000 in profits (commissions are trivial)
Both stocks are at their highest ever levels…Are they going to maintain the growth as the past has shown??? GOOD question!!!!
With LLY you will have help from dividend money coming in….with LH you depend 100% on growth.
Myself for such long term holds….5 years is not really a medium hold in most people’s books…and I have held stocks for double that long….and every one has been a dividend paying stock so I look for companies with a long history of paying those dividends…the capital growth (more unpredictable) is a side benefit.
Now I am Canadian and I know our tax laws are different on dividends…so that must be a consideration for you….I lean to LLY because of the dividend….impossible to predict where the share prices are going for that time period….especially when both are at all-time highs.