Description

Here's a simple trade idea for personal accounts only. The Donegal Group "A" shares has been written up twice before by myself and broncos727 that provide background about the company. The "A" shares are economically the same as the "B" shares except that the "A" shares are entitled to a dividend that is 10% higher than the "B" shares. The "B" shares have 10X the voting rights as the "A" shares. Here is a snapshot of the shares:

Currently, the "B" shares trade at a $2 discount to the "A" shares. Here is a graph of the difference in price between the two shares since September 2022:

Here are the prices of the two stocks;

The average volume of the "B" shares in that time frame is 1,380 shares while the median is only 480 shares. I highly recommend using limit orders of 200 or less shares. 

The pricing over the past two months seems to point to a seller wanting to get out. This provides an opportunity for the "B" shares to rebound.

Risks: 

- Illiquid

- Price may not rebound

Catalyst

Pricing reverts back to the $13-$14 range.