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Chris Stewart New York, United States Ocelot Financial is a Fee Only financial planner based in New York. We use a conservative goal oriented methodology in our recommendations. We focus exclusively on managed accounts - we feel that maintaining transparency is important and ensures that our... More
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  • This is what happens when you surprise suspend the dividend. This should be a warning to all other CEOs 0 comments
    Nov 27, 2011 9:35 PM | about stocks: TXI

    Texas Industries (NYSE:TXI) suspended their dividend October 12th in a surprise announcement since dividend watchers expected them to announce their regular dividend.  

    On October 11th, TXI closed at 32.82.   On November 25th is closed at 22.55.  That's a loss of 31% for their shareholders.  They do have a beta of 2, so you'd expect that they'd bounce about more than the S&P.  The S&P over that time period fell from 1207.25 down to 1158.67 for a loss of 4%.  That's negative alpha of 23% since that surprise announcement.

    This should be a warning to CEOs.  Surprise dividend cuts cost shareholders big time.  I wouldn't be surprised if changes to management and/or the board happen over the next year.

    Stocks: TXI
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