The Research Of Stock Investment Strategy Based On High Stock Dividends Events

After 20 years of development, the institutional mechanism for China’s stock market has been gradually improved. Since 2009, GEM, Investors are keen to hype some concept stocks. In annual financial statements disclosed high stock dividends concept stocks, investors have been highly sought. High stock dividends refer to a company bonus shares or increasing the stock of large proportion. Its essence is the internal structural adjustment in shareholders’ equity, with no impact on the ROE, the company’s profitability did not have any substantive impact.In theory, the high stock dividends concept stocks have high provident fund, retained earnings per share characteristics of high, but in the current A-share market, some companies with low provident fund per share and even a loss of performance also carry out high stock dividends. Since China’s stock market is still mainly based on small investors, they always irrational blind buy high stock dividends stocks and eventually lead to loss. A good way for investors to overcome the irrational behavior is to find a strategy which has a sustainable profitability and strictly according to the requirements of the operation, it is possible to avoid the volatility induced by false information and psychological. Therefore,considering the above, the stock investment strategy based on high stock dividends event is deeply studied in this paper.This paper consists of seven chapters, which are:Chapter One:Introduction. This chapter mainly introduces the research background and the significance, definition of high stock dividends, the theoretical tools and research methods, and the basic structure of the article. Finally, the possible innovation points and deficiencies are introduced.Chapter Two:Literature Review. This chapter first reviews the traditional dividend policy theory. Then, the main progress of modern dividend policy theory is reviewed. Finally, this chapter reviews the research literatures about the domestic and foreign research in high stock dividends.Chapter Three:Overview of Theory and Analysis. In this chapter, we first use the efficient market hypothesis and the theory of signal transmission to analyze the high stock dividends, which is the theoretical basis for the following model design and empirical analysis. In addition, this chapter makes a detailed analysis of the motivation behind the high stock dividends plan issued by the listing corporation.Chapter Four:Hypothesis and Model design. In this chapter, we first put forward four hypotheses according to the needs of the research questions. The model designs of this paper are based on the above assumptions, which provide the theoretical support for the research of this paper. The model designs of this chapter are divided into two aspects:the design of short term empirical model and the design of the model in the long term.Chapter Five:Short-term empirical research and analysis of results. Empirical analysis of the 2011 to 2015 high stock dividends companies short-term abnormal returns and the cumulative average abnormal rate of return, short-term market rate of return as well as the short-term cumulative average market yields. And on the basis of above, each of the three kinds of stock dividend ratio of short-term abnormal return rate and cumulative average abnormal return rate, the short-term market rate of return and short-term cumulative average market profit rate for empirical analysis. The abnormal return rate and cumulative average abnormal return rate, market return rate and cumulative average market return rate of high stock dividends companies with the highest stock dividends proportion is the largest, and has a high significant.Chapter Six:Long-term empirical research and analysis of results. This chapter uses the relative valuation method to estimate the value of the company after issuing the high stock dividends announcement from 2011 to 2014. The empirical results show that the high stock dividends in the day of announcement. The smaller sample company’s market value is more likely to be underestimated, while the value of the relatively large sample firms is more likely to be overestimated. And this phenomenon at the lowest sample to send high stock dividends ratio reflects the most obvious.Chapter Seven:Construction based on the high stock dividends event stock investment strategy. This chapter uses the empirical results of chapters V and VI, building short-term stock speculation strategies and long-term value investment strategy based on the high stock dividends event. When constructing a short-term speculative strategy based on cumulative abnormal returns, the author provides two options; speculative market strategy based on the cumulative market rate of return, the author also offers two options. Because of the high stock dividends event of long-term empirical results are not particularly significant, so this paper is based on two assumptions on the form of recommendations to give long-term investment strategy, the author recommended investors to long-term investment choices choose the lowest percentage of high stock dividends and the market value of relatively small samples for long-term investment.In this paper, the significance of the research on the investment strategy of the high stock dividends event mainly has two aspects:First, as the investors in the stock market of our country are mainly small and medium investors. Through the study of the high stock dividends event, we hope to provide a sustainable and profitable stock investment strategy, in order to avoid the irrational behavior of small and medium investors in the process of stock investment.Second, the paper constructed based on the high stock dividends event investment strategy can not only provide continuous return on investment for investors, but also conducive to the elimination of the market and the presence of high stock dividends event-related arbitrage space, improving our stock market efficiency.The possible innovations of this paper are as follows:First, in this article, The high stock dividends ratio is divided into three levels, respectively, for each high stock dividends ratio has been under long-term and short-term empirical research to find the best performing high stock dividends ratio in the short and long run, and using the optimal high stock dividends ratio to construct the corresponding short and long term investment strategy.Second, in this paper, the author makes a linear regression between the stock price of the company and the corresponding index of the CSI 300 index and the trade index in the estimation period, The results found that the company’s stock price and the industry’s industry index correlation is greater, so this paper in the calculation of the company’s normal income, the market index is company’s industry index.Third, the author studied sample companies in each high stock dividends ratio in the announcement date and in the next 15 days the average market profit rate and the cumulative average market rate of return.Fourth, the author used five years data from 2011 to 2015 and increased the sample size of the study so that the final result is more convincing. Although the author conducted this innovation spent a lot of time and effort, eventually got relatively valuable conclusions, which is of great benefit to the construction of the final investment strategy of this paper.But this paper also has the following shortcomings:First, this paper does not consider the effect of the distribution of cash dividends in the short term empirical study. Therefore, in the future, it also needs to be included in the study of the impact of cash dividends.Second, in this paper, the value of the company’s valuation method is relatively simple in the long-term empirical study. Although by comparing the difference between the arithmetic mean and the weighted average value and the conclusion is drawn, there is no in-depth study of the deeper reasons behind the difference between the two, and therefore need to be more in-depth study in the long-term empirical aspects.