Trade Entry for Medley Capital Corp
Today I am recommending a Buy entry for Medley Capital Corp. (NYSE:MCC) as a short term position to profit from an expected price gain between now and the next ex-dividend date in May.
MCC reduced its dividend for its March distribution, causing a significant share price drop. By now the market has absorbed the fact that a new distribution rate is in place, and investors and traders will be buying to earn the 13.4% annualized yield represented by the new $0.30 per share quarterly dividend rate.
Medley should announce its next dividend on about May 1 and go ex-dividend on about May 23. With these short term trades on high yield stocks, the goal is to get in near the quarterly low share price and sell when the stock peaks before the next ex-dividend date.
Recommendation: Buy MCC up to $9.00 per share.
Target price: $9.45 for a 5% profit in about 5 weeks. Shares will be sold no later than the day before the next ex-dividend date.