I have to thank Nick for highlighting this article to me.

What the stock chart doesn’t tell you: Dividends and Spin offs 782337 131153628685656 Clemens Scholl

We often first hand stereotype stocks based on the historical price movement. Take the example of this shipping stock Frontline (FRO). An observation of this stock from 2001 to 2011 will lead us to conclude that this stock is made for traders rather than investors because had you held on for 10 years you wouldn’t have made much.

But often a lot of things were not accounted for in a price chart

  1. The dividends. For an initial investment of 10 dollar per share, Frontline paid a total of 55 dollars of dividends. That’s almost a 2 bagger in itself.
  2. Spin-offs. In 2004 Frontline spin off their ships to a trust like company to let Frontline focus on the risks and rewards and the trust on operating the ships. Investors in Frontline get spin-off shares in this company Ship Finance. …