Crown goes ex-dividend
Recommendation
At the time of writing, Crown's shares have fallen $1.13, or 9%, today – exactly the amount of the dividends to which the stock has lost entitlement, being an interim dividend of $0.30 and a special dividend $0.83, both of them 60% franked (see Crown Resorts: Interim result 2017).
The special dividend represents part of the proceeds from the company's recent selldown of its interests in Melco Crown Entertainment — which owns casinos in Macau and The Philippines. The remaining proceeds will potentially be used to buy back up to $500m of its ordinary shares and potentially all of its $530m in Crown Subordinated Notes.
With the stock shedding $1.13 of its value, our Buy price falls to $11 (from $12) and our Sell price falls to $17 (from $18). HOLD.
Note: The Intelligent Investor Growth and Equity Income portfolios own shares in Crown Resorts. You can find out about investing directly in Intelligent Investor and InvestSMART portfolios by clicking here.
Disclosure: the author owns shares in Crown Resorts.