Thursday, 21 December 2017

New Purchase - PCG

Today, I used the proceeds from the sale of QCOM and bought 165 shares of PCG @ $42.54.

The stock closed at $51.12 yesterday and dropped to $41.61 today after PCG announced the suspension of the dividend. It is going to be a wild ride, and I hope my calculated risk pays off.


It feels weird to buy a company that doesn't pay a dividend, but the potential longterm return looks very good. It really depends on if PCG is liable for the fires, and if so, how much will they be on the hook for.

Below are links to articles on the topic:

Understanding PE&G's Dividend Cut

PG&E suspends dividends, citing potential fire-related liabilities

PG&E -14% after dividend cut but some analysts say worst may be over

We may never know if PG&E caused fires, top California regulator says






2 comments:

  1. I took advantage of that drop too but using options. To me PCG should be worth a lot more once this all settles down. I think you've got a great entry point in a solid company and while it doesn't pay dividends right now due to the fires I see no reason for them not to restart them in a few years.

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    Replies
    1. Options are a great way to play this. IMO, folks are being irrational. Sure they may be held liable, but i hope the amount is reasonable so that they can reinstate the div in a couple years.

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