Data Group Income Trust in a gentle downtrend

Jun 10th, 2011 – Comment

DGI.UN is a micro cap company operating in the specialty printing business offering what would have to be seen as a very generous yield. Both of these factors indicate a higher risk profile.


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


Read the author's full profile.


Further Research

Read more about Commercial Services.


DEAR LOU,

PLEASE GIVE ME A LITTLE INFORMATION ON THE ABOVE COMPANY. IS IT SAFE TO HOLD BEARING IN MIND THAT THE DIVIDEND IS .65 PER ANNUM.

THE LAST QUARTERLY REPORT WAS O.K. AND THE STOCK WENT UP BUT NOW IT SEEMS TO KEEP ON GOING DOWN AGAIN. ANY ADVISE??

THANK YOU VERY MUCH FOR YOUR INPUT. I KNOW YOUR INFORMATION IS ALWAYS RELIABLE.

ANNA IN MONTREAL

 

Hi Anna,

Data Group Income Fund ( DGI.UN TSX) is in the  specialty printing business producing business forms, event tickets and the like. The trust is currently in the process of converting to a dividend paying corporation and estimates that it will have completed the process by late 2011.

Lets examine the charts to see what we can discern from the past and perhaps gain some insight into the future.

The three year chart paints a picture of units that are trading in range with a gentle downtrend. The units had a lovely rise from August of 2009 when it traded at $2.25 until April of 2010 when it peaked at $8.50. Since then the units have met resistance every time it has tried to move higher.

The dividend yield at the current payout is 11.2% which is very generous and reflects the risk associated with the investment.

The six month chart outlines the move off the lows of May 2011 when the units hit $5.30 and caught a bounce to $6.50 where overhead resistance stopped the advance. The RSI and the MACD both generated a buy signal at $5.30 and a sell signal at $6.50.

At this point in time it appears that the indicators are suggesting continued selling should be expected. Over the last three months the average daily volume has been 56,469 units. In the last twelve sessions the volume has been below the average. If trust units or shares are going to go up it has to be on better than average volume. 

DGI.UN is a micro cap company operating in the specialty printing business offering what would have to be seen as a very generous yield. Both of these factors indicate a higher risk profile.

MAKE IT A PROFITABLE JUNE AND HAPPY CAPITALISM!

Categories: Commercial Services
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media