Amica Mature Lifestyles Inc. calls for patience

Jul 8th, 2013 – Comment

The yield of 4.79% may seem attractive but it could improve on further weakness.


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Hi Lou,

I’m looking for a dividend stock for my TFSA and I was seriously looking at Amica Mature Lifestyles. I would appreciate your opinion.

Cheers,

Tom, Medicine Hat

 

Hey Tom,

 

Thanks for the assignment. This will be the second time that I undertake a study of Amica Mature Lifestyles Inc. (ACC TSX). The first time was when the shares were trading for $7.80 on March 4, 2011. Sam was looking for an income stock to add to his portfolio and  wanted a fresh eyes survey of what to expect. The research conducted on his behalf identified  factors that had to be considered. The stock was a micro-cap, the trading volume was somewhat thin, and the dividend yield of 4.4%  didn’t seem to reflect those risk factors. The stock did pull back to below $6.00 by August of 2011 where it caught a bounce and started a new advance to $9.50 by November of 2012.

Another run at the charts will uncover some of the evidence you should consider in making an investment in this stock.

 

The three year chart indicates that ACC has been trading in a range with support at $8.50 and resistance at $9.50 since the middle of 2012. The MACD and the RSI signalled the April 2013 move from $8.70 to $9.70 by May, but that was all the gas in the tank. Currently the stock has pulled back and tested support at $8.50 and  has met resistance at $8.80.

 

 

 

 

The MACD and the RSI on the six-month chart have generated profitable signals. The buy in April is very well defined and the sell in May is point perfect. With the momentum indicators currently signalling that there could be continued selling pressure I would advise that you wait for more visibility before putting your money on the line. The yield of 4.79% may seem attractive but it could improve on further weakness.

 

Since the first survey conducted on March 4, 2011 there has been an improvement in trading volume, and the dividend. The market capitalization has improved but ACC is still a micro-cap stock.

Make it a profitable day and happy capitalism!

 

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