A Heavy Cornerstone
November 18th, 2006 by Grant in: Investing, Stock ThoughtsMy Cornerstone Strategic Value Fund (CLM: chart, Y!) continues to sell off like a homesick anvil, and no one seems to know why. Could it be the market just got leery of it’s huge premium to the NAV?
CLM has dropped like this several times over the past three years. See the weekly chart below, or click here for a real-time expanded view.
What makes this chart interesting (and even appealing) is not just what is presented in the chart, but how the dividends changed through these deep dips in the price.
Even though the stock price has taken a tumble 4 or 5 times over the last three years, the dividend has stayed rock solid. Every month, CLM has paid a $0.087 dividend since December of 2003. This even includes the few months back in 2005 that the stock traded below $5 per share, and still paid a $0.087 dividend, bringing the yield above 20%.
I can see the price falling to around $6.50 to $6.75, at which point if I see a plateau, it may be a great time to pick up more shares.
The fact that the dividend has stayed solid through these wild fluctuations has eased my concerns about the ongoing health of my portfolio.
Disclosure: I own shares of CLM
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November 29th, 2006 at 7:27 pm
[…] I was starting to get worried that Cornerstone Strategic Value Fund (CLM: chart, Y!) would not be able to maintain its dividend due to the 50% premium to the net asset value (NAV). […]