In the history of this Company we have seen a several Share Splits, and annual Dividend payouts Right through out since early 2000s.
The last Split was made in May 2015. At the time they had a split of 1 to 2, meaning if you had one share of LFIN, you would end up having 2 shares after the split is complete. In addition to the split, they have been paying a decent amount of Dividends every year.
This post will help you to understand how would a long term shareholder have gained by investing into this Stock had he bought one share at the time of the said Split in May 2015.
On the 20th of May 2015 they made the announcement to split the share from 1 to 2. But the announcement was made in the evening.
The following day which is the 21st of May 2015, you could have bought one share at 203/= rupees. Your Average Cost including commissions would have been 205/27 rupees.The next day, that's the 22nd they announced a dividend of 10/= rupees. So you are now entitled to that dividend as well. The stock was split and commenced trading on the 14th of July 2015. As a result of the split your one share has become 2. On the 14th of July when it commenced trading, the price range was 110/= to 117/= rupees. If you are a Long Term Investor you wouldn't have sold even if you had a profit, instead you will decide to hold.
The next year (2016) they gave a dividend of 7/50 per share. Since you had two shares you would've received 15/= rupees. So with the earlier dividend of 10/= rupees that you received immediately after you bought your one share, now you have received 10/= plus 15/= equals 25/= rupees by way of dividends. The following year (2017) they paid a dividend of 9/= rupees per share. That time too, since you now have 2 shares you received 18/= rupees, increasing your dividends received amount to 43/=. In 2018 they paid a dividend of 11/= per share, hence your effective dividend is 22/=. As such you have received 65/= rupees by way of dividends. The dividend in 2019 was 12/= per share. That works out to a dividend of 24/= rupees. This way you have now received 89/= rupees of dividends.
Remember your initial cost was 205/27, and for that you now have received 89/= rupees of dividends. That is a percentage return of 43.36%. Since you have been holding that for 4 years it works out an annual return of 10.84%. The Stock is now trading between 131 and 135 as at 9th of August 2019. Say you take a price of 130/=, your present market value for the 2 shares will be 257/09 after taking the commissions away. Therefore the present market gain for your price of 205/27 rupees will be 257/09 minus 205/27 equals 51/81 rupees. As such your total profit from market price gain which is called the capital gain and the dividends will be 89/= plus 51/81, which is a total of 140/81 rupees. If you take out the withholding tax out of the dividends your total return will be 130/95 rupees. Your present ROI therefore is 130/95 divided by 205/25 equals 63.8%. As you have been holding it for 4 years, the annualised return will be 63.8% divided by 4 equals 15.95%. This ROI was calculated only to see the present value, and you have not sold the 2 shares you own as yet.
LFIN has been splitting its share on several occasions, therefore you can't rule out them doing it in the future as well. As such if you still want to hold on to this stock, your value will increase even further.
Also if you closely look at the chart given here you will notice that it is trading within a channel where the present resistance line in green is at around 136/80. This area needs to be broken out, to test the area highlighted in yellow. From there onwards we will see new highs. But as the history of this stock has shown, the major price action has happened during the time of a split. Since they have not made a decision to split for 4 years, we may be nearing the year of decision making for the split. But that decision will happen only at the right time based on the thinking of the Board of Directors.
For any one who are thinking of building a long term investment portfolio, LFIN is a must have stock.
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