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Buying company stock

HuskyJWHuskyJW Member, Swaye's Wigwam Posts: 14,874 Swaye's Wigwam
edited May 2022 in Tug Tavern
The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.
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  • RaceBannonRaceBannon Member, Swaye's Wigwam Posts: 107,264 Founders Club
    Walmart stock is a good buy
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  • creepycougcreepycoug Member Posts: 23,599
    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
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  • creepycougcreepycoug Member Posts: 23,599
    RaceBannon said:

    Walmart stock is a good buy

    ISWYDT.
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  • HuskyJWHuskyJW Member, Swaye's Wigwam Posts: 14,874 Swaye's Wigwam
    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
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  • creepycougcreepycoug Member Posts: 23,599
    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
    No brainer man. That's a pretty healthy discount, too, in my experience.
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  • HuskyJWHuskyJW Member, Swaye's Wigwam Posts: 14,874 Swaye's Wigwam
    edited January 2021
    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
    No brainer man. That's a pretty healthy discount, too, in my experience.
    Right on. I really appreciate it

    One of my mom’s died earlier this year so I am a trust fund guy now too.....and I get her pension. Kind of overwhelming so am gonna have a bunch of questions
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  • creepycougcreepycoug Member Posts: 23,599
    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
    No brainer man. That's a pretty healthy discount, too, in my experience.
    Right on. I really appreciate it

    One of my mom’s died earlier this year so I am a trust fund guy now too.....and I get her pension. Kind of overwhelming so am gonna have a bunch of questions
    Sorry to hear of that my man. Losing parents is a big deal. Hasn't happened to me yet ... my parents were young when they had me. But it's on the horizon for one of them.

    One caveat here: we're not dispensing financial advice. It's just "what I would do" stuff. Also, an underlying assumption, at least for me, that is highly relevant is your belief in the company and hence the stock. As a yield it ought not to be terrible too volatile on price, at least on a relative basis. On the other hand, when the shit hits, they all get smacked, and when a yield stock cuts its dividend, they often get really smacked.

    At the end of the day, it's equity. Read the 10-K and the liquidity section of MD&A carefully. That's where they should be telling you the relative security of the dividend.
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  • HuskyJWHuskyJW Member, Swaye's Wigwam Posts: 14,874 Swaye's Wigwam
    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
    No brainer man. That's a pretty healthy discount, too, in my experience.
    Right on. I really appreciate it

    One of my mom’s died earlier this year so I am a trust fund guy now too.....and I get her pension. Kind of overwhelming so am gonna have a bunch of questions
    Sorry to hear of that my man. Losing parents is a big deal. Hasn't happened to me yet ... my parents were young when they had me. But it's on the horizon for one of them.

    One caveat here: we're not dispensing financial advice. It's just "what I would do" stuff. Also, an underlying assumption, at least for me, that is highly relevant is your belief in the company and hence the stock. As a yield it ought not to be terrible too volatile on price, at least on a relative basis. On the other hand, when the shit hits, they all get smacked, and when a yield stock cuts its dividend, they often get really smacked.

    At the end of the day, it's equity. Read the 10-K and the liquidity section of MD&A carefully. That's where they should be telling you the relative security of the dividend.
    Totally get it. I just know next to zero on this stuff...so at least wanted a bit of insight into original question. Really appreciate it


    Now onto RMD’s and Inherited IRA’s.....
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  • creepycougcreepycoug Member Posts: 23,599
    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
    No brainer man. That's a pretty healthy discount, too, in my experience.
    Right on. I really appreciate it

    One of my mom’s died earlier this year so I am a trust fund guy now too.....and I get her pension. Kind of overwhelming so am gonna have a bunch of questions
    Sorry to hear of that my man. Losing parents is a big deal. Hasn't happened to me yet ... my parents were young when they had me. But it's on the horizon for one of them.

    One caveat here: we're not dispensing financial advice. It's just "what I would do" stuff. Also, an underlying assumption, at least for me, that is highly relevant is your belief in the company and hence the stock. As a yield it ought not to be terrible too volatile on price, at least on a relative basis. On the other hand, when the shit hits, they all get smacked, and when a yield stock cuts its dividend, they often get really smacked.

    At the end of the day, it's equity. Read the 10-K and the liquidity section of MD&A carefully. That's where they should be telling you the relative security of the dividend.
    Totally get it. I just know next to zero on this stuff...so at least wanted a bit of insight into original question. Really appreciate it


    Now onto RMD’s and Inherited IRA’s.....
    You need a good tax accountant. If the corpus of the trust is north of $5 million or so (that's a rule of thumb, not science, threshold), then think about ponying up for a good tax or T&E lawyer.

    @PurpleThrobber you agree with that?
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  • HuskyJWHuskyJW Member, Swaye's Wigwam Posts: 14,874 Swaye's Wigwam
    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
    No brainer man. That's a pretty healthy discount, too, in my experience.
    Right on. I really appreciate it

    One of my mom’s died earlier this year so I am a trust fund guy now too.....and I get her pension. Kind of overwhelming so am gonna have a bunch of questions
    Sorry to hear of that my man. Losing parents is a big deal. Hasn't happened to me yet ... my parents were young when they had me. But it's on the horizon for one of them.

    One caveat here: we're not dispensing financial advice. It's just "what I would do" stuff. Also, an underlying assumption, at least for me, that is highly relevant is your belief in the company and hence the stock. As a yield it ought not to be terrible too volatile on price, at least on a relative basis. On the other hand, when the shit hits, they all get smacked, and when a yield stock cuts its dividend, they often get really smacked.

    At the end of the day, it's equity. Read the 10-K and the liquidity section of MD&A carefully. That's where they should be telling you the relative security of the dividend.
    Totally get it. I just know next to zero on this stuff...so at least wanted a bit of insight into original question. Really appreciate it


    Now onto RMD’s and Inherited IRA’s.....
    You need a good tax accountant. If the corpus of the trust is north of $5 million or so (that's a rule of thumb, not science, threshold), then think about ponying up for a good tax or T&E lawyer.

    @PurpleThrobber you agree with that?
    No....it’s nothing like that
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  • creepycougcreepycoug Member Posts: 23,599
    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
    No brainer man. That's a pretty healthy discount, too, in my experience.
    Right on. I really appreciate it

    One of my mom’s died earlier this year so I am a trust fund guy now too.....and I get her pension. Kind of overwhelming so am gonna have a bunch of questions
    Sorry to hear of that my man. Losing parents is a big deal. Hasn't happened to me yet ... my parents were young when they had me. But it's on the horizon for one of them.

    One caveat here: we're not dispensing financial advice. It's just "what I would do" stuff. Also, an underlying assumption, at least for me, that is highly relevant is your belief in the company and hence the stock. As a yield it ought not to be terrible too volatile on price, at least on a relative basis. On the other hand, when the shit hits, they all get smacked, and when a yield stock cuts its dividend, they often get really smacked.

    At the end of the day, it's equity. Read the 10-K and the liquidity section of MD&A carefully. That's where they should be telling you the relative security of the dividend.
    Totally get it. I just know next to zero on this stuff...so at least wanted a bit of insight into original question. Really appreciate it


    Now onto RMD’s and Inherited IRA’s.....
    You need a good tax accountant. If the corpus of the trust is north of $5 million or so (that's a rule of thumb, not science, threshold), then think about ponying up for a good tax or T&E lawyer.

    @PurpleThrobber you agree with that?
    No....it’s nothing like that
    Still - check in with an accountant at least ... make sure you're not fucking anything up that will wind up costing you more than you're getting. If it's in the trust, you ought to be able to keep it in the trust. Did she leave instructions for the Trustee? What's the basic deal?
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  • PurpleThrobberPurpleThrobber Member Posts: 44,689 Standard Supporter
    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    creepycoug said:

    HuskyJW said:

    The company I work for offers stock purchases at a 15% discount. Isn’t this a no-brainer to do? Say it stays the same....time to cash out don’t I get a 15% return?

    I started a few paychecks back but still see I don’t have any holdings. Apparently they buy the shares like 4 times a year.

    Yep. ESPPs are a good deal if you believe in the stock. If it's a dividend stock, you are locking in built-in yield at a price that is 15% discounted to market. Whatever the yield is at a given time, you paid less for it ... forever until you sell.
    It is
    No brainer man. That's a pretty healthy discount, too, in my experience.
    Right on. I really appreciate it

    One of my mom’s died earlier this year so I am a trust fund guy now too.....and I get her pension. Kind of overwhelming so am gonna have a bunch of questions
    Sorry to hear of that my man. Losing parents is a big deal. Hasn't happened to me yet ... my parents were young when they had me. But it's on the horizon for one of them.

    One caveat here: we're not dispensing financial advice. It's just "what I would do" stuff. Also, an underlying assumption, at least for me, that is highly relevant is your belief in the company and hence the stock. As a yield it ought not to be terrible too volatile on price, at least on a relative basis. On the other hand, when the shit hits, they all get smacked, and when a yield stock cuts its dividend, they often get really smacked.

    At the end of the day, it's equity. Read the 10-K and the liquidity section of MD&A carefully. That's where they should be telling you the relative security of the dividend.
    Totally get it. I just know next to zero on this stuff...so at least wanted a bit of insight into original question. Really appreciate it


    Now onto RMD’s and Inherited IRA’s.....
    You need a good tax accountant. If the corpus of the trust is north of $5 million or so (that's a rule of thumb, not science, threshold), then think about ponying up for a good tax or T&E lawyer.

    @PurpleThrobber you agree with that?
    No....it’s nothing like that
    If it’s a smaller estate, spend a couple hundred bucks and get an attorney to assist with things like letters of testamentary. The attorney also usually have an express line at the court house to deal with stupid shit.

    If it’s of any size, get a tax attorney to file the estate return. I can’t stand doing taxes so I always hire that out anyway.

    Sorry for your loss.
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  • godawgstgodawgst Member, Swaye's Wigwam Posts: 2,522 Founders Club
    Chiming in as others have said, it is a really good deal. Only piece of advise I could add is to do all you can to know the companies financials, so you don't get blindsided if something material changes.

    My company has offered buy one/get one shares that vest in 5 years. Good news is because of that I am ahead. Bad news is the parent company is in France and stock itself is basically even last 10 years, which should be really hard to do as they are the 2nd biggest organization (electrical distribution) in the world but they have managed to do so.



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  • creepycougcreepycoug Member Posts: 23,599
    edited January 2021
    godawgst said:

    Chiming in as others have said, it is a really good deal. Only piece of advise I could add is to do all you can to know the companies financials, so you don't get blindsided if something material changes.

    My company has offered buy one/get one shares that vest in 5 years. Good news is because of that I am ahead. Bad news is the parent company is in France and stock itself is basically even last 10 years, which should be really hard to do as they are the 2nd biggest organization (electrical distribution) in the world but they have managed to do so.



    Good advice all around from @PurpleThrobber and @godawgst . Again, can't emphasize enough, when you're dealing with a dividend stock, you have to read the Liquidity section of MD&A (10-Ks and 10-Qs) very closely. That's where concerns about maintaining the dividend should be disclosed if they're following the rules. Use that narrative along with looking at the financials and that will put you in a good position of not being clueless.
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  • TheRoarOfTheCrowdTheRoarOfTheCrowd Member, Swaye's Wigwam Posts: 1,730 Founders Club
    edited January 2021
    So a 15% discount is good, however it really does depend on the underlying value of the stock. In other words if the stock is substantially over valued, getting a 15% discount is helpful but still may mean that you are paying more for the stock than it is worth.

    The better idea is to get a sense of the company... is this an above average company with an above average growth rate in earnings, revenue and cash flow? What do the analysts think?

    To get a sense of that type of analysis you can go to Zacks and print the research report... Here is a link https://www.zacks.com/stock/research/ABT/company-reports

    When you go to the site, the tabs on the left link you to additional helpful information such as the analysts opinions, Brokerage recommendations, Financial data, charts, etc..

    Hope this helps
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  • TequillaTequilla Member Posts: 19,936
    Piling on ...

    First off, it can’t be stated enough that nothing said here should be taken as financial advice and more of people just running their mouth about things.

    That said ... ESPPs are generally a good idea and 15% discounts are solid.

    Couple of things to consider in addition to the items mentioned previously:

    1) What the price the 15% is applied against matters ... is it as of a certain date? Lowest value of first or last day of a period? Average price of period? Point being that depending on the term can lead to the effective discount being +/- 15% that is the headline of the ESPP

    2) Is the company stock publicly or privately traded? The ability to liquidate the stock upon receiving matters.

    3) Are you subject to any blackout periods where you can’t trade the stock? This is generally applicable to anybody that has knowledge of any part of a Company’s financial performance.

    4) What is your investment horizon for stock purchased? The shorter your time horizon the more you’d be well advised to get tax/financial advice. Additionally, if you are subject to a blackout period you’ll be well served to have a financial advisor scheduling transactions at regular intervals to avoid the appearance of impropriety.

    5) To reiterate what others have said, there’s no substitute for being active in understanding your company. There is something to be said for not being too leveraged in owning stock with your company because if things go south, not only do you lose with the stock but you likely can lose with your job. It’s something I’d take with a grain of salt and on a case by case basis but it’s important to at least be aware of that,

    Sorry to hear about your mother ... the estate/inheritance component of deaths (or impending as family members age) can be as messy as it gets
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