Trade Entry for TCP Capital Corp
The early 2016 market correction has driven most, if not all of the high-yield stocks I follow for dividend swing trades to very low prices compared to the last couple of years. Although markets remain volatile, it appears that we can take advantage of the natural ex-dividend price swings of those stocks that pay near double-digit yields.
Today, I recommend a Buy entry for TCP Capital Corp (NASDAQ: TCPC). This stock went ex-dividend on December 15th and hit a new quarterly low on January 20th. TCPC will again go ex-dividend in mid-March.
Of the stocks I follow, TCPC has exhibited one of the higher level of quarterly price swings, averaging 10%. With this trade, I am looking for a 6% gain in the two months before the next ex-dividend.
Recommendation: Buy TCPC below $13.20. Target price will be 6% above the January 27th closing value.