Don't Fall for the Special Dividend Sucker Punch (AAPL, COST, LVS, ORCL)

Don't Fall for the Special Dividend Sucker Punch

Have you noticed the sharp decline in Apple's (NASDAQ: AAPL ) shares? Several theories are floating about as to what's behind the sell-off, but the most popular may be the company's presumed reticence in paying shareholders a special dividend. Traders appear to be cycling out of Apple in order to capture huge one-time payments elsewhere. Consider:

Costco Wholesale (NASDAQ: COST ) plans on paying out $7 a share before year-end.
Las Vegas Sands (NYSE: LVS ) will pay an extra $2.75 a share.
Oracle (NASDAQ: ORCL ) won't issue a special payout, choosing instead to combine the next three scheduled dividend payments into a lump-sum distribution on Dec. 21.

All of which would be good if greed didn't get in the way.

Too many are bidding up or selling off quality businesses merely for their stance on special dividends. Apple won't pay one? Sell! Las Vegas Sands is paying cash? Woo-hoo!

Please don't be that type of investor. Special dividends mean little in the larger scheme of a Foolish investment thesis, both practically and financially. Click on the video below to find out more.

Costco Wholesale's low prices haven't just benefited customers -- shareholders have walloped the market, returning 11,000% over the past two decades. However, with prices near all-time highs, is the ride over for Costco investors? To answer that, we've compiled a premium research report with in-depth analysis on whether Costco is a buy right now, and why. Simply click here now to gain instant access to this valuable investor's resource.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's Web home and portfolio holdings, or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Costco Wholesale, Oracle, and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Costco Wholesale. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On December 07, 2012, at 4:46 PM, jordanwi wrote:

What about shorting before the ex-div date. I've often been curious of this strategy. Yay or nay? What's the downside here?
Report this Comment On December 07, 2012, at 4:46 PM, jordanwi wrote:

*?
Report this Comment On December 07, 2012, at 4:55 PM, TMFMileHigh wrote:

@jordanwi,
>>What about shorting before the ex-div date. I've often been curious of this strategy. Yay or nay? What's the downside here?
I know some use this strategy; I find it too risky. There's just no way to know how the computers will react when they detect a stock moving a certain way.
Sorry I don't have any concrete data or more thoughtful analysis.
Good luck and Foolish best,
Tim
Report this Comment On December 09, 2012, at 2:51 PM, spokanimal wrote:

Thanks for this useless "teaser" that you wrote only to serve as a lead-in to 2 of Motley Fool's paid research report...
... and I would add that although Travis Hoyum sometimes writes a decent article, almost none of them have risen to the level that I would expect from a seasoned analyst.
Spokanimal
Report this Comment On December 09, 2012, at 8:39 PM, BenKeel wrote:

Agreed Spokanidiot, oops sorry I mean spokanliberal.
You're right Motley Fool has not only the worst name in business but also writes the worst articles.
These guys LOVED US Steel last year at $41.
Report this Comment On December 10, 2012, at 12:32 PM, TMFMileHigh wrote:

@spokanimal,
>>Thanks for this useless "teaser" that you wrote only to serve as a lead-in to 2 of Motley Fool's paid research report...
So you're not falling for special dividends? Great! The reader who commented before you had questions and I'm happy to have answered them.
That's what were about here: educate and enrich, and hopefully amuse.
Foolish best,
Tim
--
Tim Beyers
TMFMileHigh, Motley Fool Rule Breakers Analyst, Supernova Odyssey I Portfolio Contributor
Web: http://timbeyers.me
Twitter: @milehighfool
Tumblr: http://timbeyers.tumblr.com/

updated 3 hours ago Sponsored by:
	DOW	15,303.10	8.60	0.06%
	S&P 500	1,649.60	-0.91	-0.06%
	NASD	3,459.14	-0.28	-0.01%

LVS	$57.55		-0.25	-0.43%
Las Vegas Sands Co…		CAPS Rating:

ORCL	$34.05		-0.18	-0.53%
Oracle Corp.		CAPS Rating:

AAPL	$445.15		+3.01	+0.68%
Apple		CAPS Rating:

COST	$114.39		+1.20	+1.06%
Costco Wholesale		CAPS Rating:

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Don't Fall for the Special Dividend Sucker Punch

Comments from our Foolish Readers

Report this Comment On December 07, 2012, at 4:46 PM, jordanwi wrote:

Report this Comment On December 07, 2012, at 4:46 PM, jordanwi wrote:

Report this Comment On December 07, 2012, at 4:55 PM, TMFMileHigh wrote:

Report this Comment On December 09, 2012, at 2:51 PM, spokanimal wrote:

Report this Comment On December 09, 2012, at 8:39 PM, BenKeel wrote:

Report this Comment On December 10, 2012, at 12:32 PM, TMFMileHigh wrote:

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