Another dividend growth stock bites the dust.
Berkshire Hathaway has been approved to acquire HNZ at $72.50 per share. This amounts to a 20% gain over yesterday's closing price. To be honest, I'd rather continue to be a HNZ shareholder than take the capital gain. I really like what Heinz is doing internationally, apparently Buffet does too.
The timing of the deal is actually perfect for me. I bought my shares 14FEB2012, meaning I only need to wait one more day for the capital gains to be taxed at the long term rate. I originally bought the shares for $51.73. In the end I'm getting a 40% capital gain plus a years worth of dividends. Total return will equal about 43%. Not bad for 366 days.
I will be using the cash to buy a replacement dividend growth stock. I'm currently looking at GD and TD. I'm leaning more towards TD at this time, but will have to see what the market presents.
Sorry to see you lose your holding, but you can't agrue with that one year gain.
ReplyDeleteYes it will be ok. I recently replaced HNZ and my income got a small boost. I'm inching closer to the promise land!
DeleteI saw this as soon as I logged onto my brokerage account this morning. I've already sold my shares(long-term capital gains) and deployed the capital. I will be talking about that trade soon.
ReplyDeleteI look forward to see what you buy with your proceeds. You can't complain about a 40% gain in about a year!
Yes not too shabby. It's funny that exactly one year later (the exact day) Buffet decided to buy it. Very strange...
DeleteCI,
ReplyDeleteAlways sad to see a loyal holding go by the wayside, but this turned out to be a home run for you. The timing couldn't be better!
I had looked at HNZ a few times and passed. I'm kicking myself now!
Have fun shopping with the new capital.
Best wishes!
To be honest there was a lot of luck involved. I mean I like HNZ and all but I don't know how I managed to pick it up at the 52 week low. As I recall, stocks weren't especially cheap last Feb either. I'd rather be lucky than smart.
DeleteCongratulations! That's a great return!
ReplyDeleteThanks! lucky though!
DeleteWill Heinz continue to pay dividends until the deal is finalized (which I read would be in the 3rd quarter)?
ReplyDeleteTo be honest, I haven't looked at it since I sold my shares. A few years a different company I owned was bought out and still paid divideds until the deal was finalized.
DeleteThe best course of action would be to get in touch with Heinz's investor relations department. They should be able to answer any questions. A quick email or phone call should suffice.
The problem is that I am forced to take a capital gain on HNZ (admittedly a nice one) in a taxable account on timing Warren Buffet has chosen. I had hoped to continue the nice yield on it until it was my decision on the timing of a sale.
ReplyDeleteBought and held since 1969. DRIPPED .. How the hell am I am to determine thje basis without records . ?
ReplyDeleteI used the free Charles Schwab basis calculator. and got the unhappy but accurate results.
DeleteI also purchased Heinz long ago and with 7 splits and without dividend reinvestment it has still grown large. I wanted it to be part of my estate so my children could sell and pay no capital gains. Damn you Warren Buffet