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Hi Larry,
Let's say a company spins off a portion of themselves and
provides a capital distribution. And if it's a $60 a stock on the day
before the ex-date and it's a $30 stock. What you need to do is calculate
a dilution factor that applies to all history. In this case, it's a fairly
simple factor of 0.5 which applies to all previous prices and volume (with the
volume, though, you divide by the dilution factor). Note that if $30 were
simply taken off the value of all historical data, your % return would be
skewed. This is why there needs to be a factor applied. If the
capital distribution were say $15, your dilution factor would be
0.75.
It gets rather complicated on some markets and
events. Some companies insist on trying to do everything on the same day -
eg. stock split, demerger (ie capital distribution) and dividend all at once, so
some of them often need a closer look to untangle the mess.
When it comes to normal cash dividends, we do not make any
adjustments. If adjustments were made due to cash dividends, typical forms
of technical analysis such as determination support/resistance levels would be
skewed.
A case can be made for adjusting for cash dividends which
would then show an accurate "total return", but this would also throw
comparisons with most indexes into disarray, since most indexes are not dividend
adjusted.
Note that stock dividends (which is another way of saying
bonus issue) is a dilutionary event. Whenver a company "declares" a stock
dividend they aren't really doing much apart from diluting the share
price.
Best regards,
Richard
Dale.
Norgate Investor Services
- Premium quality Stock, Futures and
Foreign Exchange Data for
markets in Australia, Asia, Canada, Europe,
UK & USA -
Hi
Richard,
I,
too, have a question, not directly related to MetaStock, but of interest, I
hope. Obviously when a stock splits, its previous price history is
adjusted to reflect the split. How are large capital distributions and/or
dividends handled? In other words, say a stock trades at 60 and they
pay shareholders a $30.00 cash distribution. I know the current price
would be reduced by the $30.00 amount, but what about the historical
prices? Are they, too, reduced by the $30.00 amount or not? For some
reason, my feeble brain cannot remember how this is handled.
Best,
Larry
Carhartt
MasterDATA Composite Plug-in For
MetaStock
The
Only Source for Index & ETF Composite/Breadth
Historical MetaStock Data
Hi Andy,
Right now we don't have any immediate plans for Canadian
or European data. We tried to come up with a decent LSE feed about a
year and a half ago, but found that there were significant problems with
regards to the way the LSE provides data.
There are multiple trading systems, some market-maker
driven, some electronic order book and some a hybrid of the two. Some
stocks traded on multiple systems. There was also a problem in that many
markets were reported as a mid-point between the bid and ask, rather than the
actual trades that went through. This, we think, was due in part to the
LSE allowing trades to be reported up to two hours later than they
occur.
We surveyed multiple data sources for the data and found
that there were rarely agreements between the different data sources.
Given the unreliability of such data, we decided that it was prudent not to
offer data that was so inaccurate. We'll have another look at it in the
future - hopefully the LSE will have a definition of what they consider
to be the official open, high, low, close and volume.
Best regards,
Richard
Dale.
Norgate Investor Services
- Premium quality Stock, Futures and
Foreign Exchange Data for
markets in Australia, Asia, Canada,
Europe, UK & USA -
Richard,
Lots of rave reviews
lately which is great to see. The only thing stopping me personally from
switching right now is this question of coverage. Any comments on whether you
intend to cover the Canadian and/or European (esp. LSE) markets in the near
future?
Andy
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