I have currently purchased several parcels of FGL to generate some free for wine or beer (your personal choice, mine is wine).
Over the last 5 years from about the 19th August till say 12th September each year FGL has not only performed very well, but has also gone ex a dividend of around 14 cents very early in September, so you can either participate in the dividend reinvestment scheme & have some "free" FGL shares generating more dividends in the future or just cash out the profits. Note this strategy is dependent on FGL Full year profit on 25/8/2009 being taken positively by the market, so it can't be guaranteed. The first half year profit was okay, aside from some drops in volume, FGL have also warned of some writedowns i.e. about $135m associated with separating the beer/cider/spirits division from the wine division, but in the long term this should not only have cost savings but also improve wine sales.
FGL Prices over previous years:
20/8/2008 $5.33 12/9/2008 $5.75 Plus Div.
21/8/2007 $5.86 12/9/2007 $6.38 Plus Div.
21/8/2006 $5.60 12/9/2006 $6.14 Plus Div.
19/8/2005 $5.55 12/9/2005 $5.74 Plus Div.
19/8/2004 $4.64 13/9/2004 $4.65 Plus Div.
Whilst no guarantee can be made the same pattern will occur this year, the chart is already starting to look positive. Also it appears FGL goes into the market to buy the shares for the dividend reinvestment program so the share is to some extent supported between early September & October by their own buying of shares.
My strategy also has a certain "green" element in that recycling is happening i.e. hopefully my profits will be used on FGL products, so increasing their sales in the next year.
Please do your own research on FGL & if it works I have paid for my shout of a good red on FGL!
Regards
Buffett
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