Lennox International Inc. (LII)

Trade Timeline

Risk Factors

• •Win rate is not decisive: Historical win rate of 63.8% for the 1d buy / 14d sell strategy still implies ~36% chance of a losing trade.
• •Limited capture edge: Average capture yield of 0.426% versus a $1.30 dividend on a $497.20 stock (~0.26%) suggests the edge comes from short-term price behavior, which may not persist.
• •Volatility and gap behavior: 14-day ATR of 2.60% means daily moves can easily overwhelm the ~0.26% dividend; short-term news can negate the capture benefit.
• •Pattern risk: Historical 7d and 14d gap fill rates of 100% and average recovery in 12.2 days may not hold in future regimes or around macro events.
• •Execution and slippage: Tight entry/exit timing around the ex-date can be affected by spreads and liquidity, impacting realized returns versus the 1.42% expected return.

Action Checklist

• 1.Confirm ex-dividend date (currently 2025-12-31) and verify no recent major news has changed the risk profile.
• 2.Assess portfolio fit: decide if a 1.05% forward yield and high-quality, Tier 1 profile align with your long-term income vs. total-return goals.
• 3.For long-term investors, determine desired position size based on overall sector exposure and risk tolerance; consider building gradually rather than all at once.
• 4.For capture traders, plan a 1-day-before entry (around 2025-12-30) with a predefined position size and maximum loss limit based on the 2.60% ATR.
• 5.Set exit rules for the 14-day hold strategy (target around 2026-01-14): use either a time-based exit, a profit target near the 1.42% historical average, and/or a stop-loss informed by volatility.
• 6.Monitor price action and momentum: confirm the short-term 5-day positive slope (0.0642% per day) remains intact going into the ex-date.
• 7.Avoid overlapping large, event-driven risks (earnings, macro data, sector news) that could invalidate the historical capture statistics during the hold window.