veksi
23 Jan 2017
divi cut That's about 40% cut ouch.Although after costs go down this is likely to risethe year after. This will sink today i suspect.
Bill1703
06 Jan 2017
Re: Interesting posts "My favourite holding just now is cash. I've raised my cash levels a lot, all since Christmas. My reasoning is simple; I can't find much value out there..."Yes, I have been long cash for a while - too much so. And my portfolio continues to perform pretty strongly... I agree on the market overall, though I see it as reasonably fully - rather than over - valued. Particularly when you make allowance for improving corporate cash flows and balance sheets, if less so on profits, over recent years. The dividend yield (actual and prospective) on the market is higher than I ever remember it - other than in brief, crash scenarios.And the market is only ever a loose amalgam of only vaguely connected sectors and stocks, each with their own individual stories. There are always specific value opportunities out there - maybe fewer currently than a year ago, for example, but still more than enough for any PI portfolio. Of course, identifying them successfully is the somewhat harder part of this... "I'm hoping for a dip on the S&P, but it may be a forlorn hope. I'll let you know if I like anything... Cheapest stock Aviva?"Just a word of caution on Aviva. I bought in post-Brexit when it was a steal, but now pushing 490p... my analyst friends have been warning me that there is always a good time to buy Aviva and a good time to sell it, and now might be the latter. Still, I am happy holding for the long term, but expectations have to be modest in the near term?
Greyinvestor
06 Jan 2017
Re: Tentatively in Be a bit careful with Clarkson, they are going to be in line with a much reduced forecast. I'm hoping that BMS will do better with a forecast that had a far greater reduction........I was a Bonmarche holder, and got burned. I should have listened to the wife; we visited a garden centre branch, which was quiet and had what looked like not very nice stock......I was too influenced by numbers........ITV could be a good one; well run and vast improvement in program quality.....
Bill1703
06 Jan 2017
Re: Tentatively in "For my portfolio it's really about the dividend. Conventional wisdom suggests this will be cut (current yield is 9.2%) but the Board held it knowing that it wouldn't be covered this year."Yes, GS, not many +9% yields stick around for long - either way! I would say the market is discounting at least 50% chance of a significant cut (eg. halving)... and I myself had previously argued they probably should cut it, to a level from which it can actually grow, given the consistently low levels of earnings cover.However, market forecasts seem to be stubbornly sticking to a held dividend - I would have thought, the company might have done more to "manage" expectations if intentions had been otherwise? And as you say, they had a very good chance to cut it at the interims and did not. Having not done so, whatever the actual results at full-year, if the forward outlook is in any way more upbeat, it would be somewhat odd to cut it then.So no guarantee - and I am not sure a divi cut would be necessarily bad for the SP anyway (at over 9%, the market is not currently giving value for the divi)... But I am now inclined to think they will hold it this year, although any commentary on forward policy will be interesting.
Bill1703
06 Jan 2017
Re: Tentatively in "Perhaps it was Bill1703's tip for 2017!"Yes, GS, pretty sure it must be that! Or, just possibly, it is today's trading update from Clarkson - as suggested elsewhere - which should be read as positive... Although, have to say, bit of a quirky turn of phrase:"Clarkson PLC confirms that the full year results for 2016 are expected to be in line with expectations"Of course they should be "expected" to be in line with expectations - otherwise they wouldn't be expectations!! Maybe more convincing if they'd said "will be" in line....FWIW the BMS inclusion in my Top 10 was partly an opportunistic timing thing, given where it ended the year. Having held this for years, I know how it trades - every time it has slumped to this kind of level it has managed a pretty quick and sizable rebound. I don't expect its highly-cyclical pattern to change any time soon - but with any kind of reasonable uptick in market conditions (and there is good reason to hope for such), you could easily get 30% or even 50% out of this over 2017. Of course, I say "could"...
Greyinvestor
06 Jan 2017
Interesting posts An interesting bunch of recent posts on this site.I've got a decent holding in BMS and I'm keeping it. This is the main reason;[link] baltic dry index is the key input to BMS and it's gone from disaster to a reasonable level in the last few months. So BMS should steadily rebuild it's profits.I've bought and sold Capita, locking in a quick 10% profit. I'll buy them back if they fall again.My favourite holding just now is cash. I've raised my cash levels a lot, all since Christmas. My reasoning is simple; I can't find much value out there. Directors seem to feel the same, judging from their own stock buying.I'm hoping for a dip on the S&P, but it may be a forlorn hope. I'll let you know if I like anything......Cheapest stock Aviva?
Vosene
06 Jan 2017
Re: Tentatively in Clarksons trading update today, says inline with expectations
Guitarsolo
06 Jan 2017
Re: Tentatively in Not that I am complaining, but does anyone know why BMS is up 8% in one day?.... I can't see an RNS and surely it is not just because I picked up 2,000 shares yesterday!Perhaps it was Bill1703's tip for 2017!Guitarsolo
Guitarsolo
05 Jan 2017
Tentatively in Have dipped a toe and about half a foot back in to this one at 281.5p, I've held this before and hope that this is still a decent company just struggling in a difficult market. I'll add a couple of small tranches if it hits 260p but I think that might be unlikely. For my portfolio it's really about the dividend. Conventional wisdom suggests this will be cut (current yield is 9.2%) but the Board held it knowing that it wouldn't be covered this year. Closing my eyes and crossing my fingers I hope that this is a sign of the Board's confidence that the drop in earnings will not last. Guitarsolo
Hydrogen Economy
05 Jan 2017
Re: My Top 10 Stock Tips for 2017 BillThanks for a detailed and thoughtful response. Certainly the many and large exceptionals, adjustments, tax credits, write downs etc have made it hard to read VOD performance and how sustainable the dividend really is. FCF in 15/16 was 1.09 and 1.01Bn, around 4pps, debt increasing by 8.5 and 6.9 Bn respectively. Guidance in AR is that FCF will be 3.2Bn in 2017, ~12pps almost covering Div. Weak sterling should help as any hedging expires.Operating performance following Project Spring and with integration of various acquisitions will presumably be key.Taking on-board your comments and with some further digging I feel less negative but will await clearer signs of progress before buying back. A minor personal observation, on a short trip to UK last year I went to a VOD shop for a short term PAYG simcard, as one of only 2 customers I waited several minutes whilst the many staff busied themselves with I know not what so I left. Went to Carphone warehouse few doors down where they could not have been more helpful and gave a great deal. Not encouraging sign for VOD, but maybe one off.Apologies to Braemar BB for the off topic, didn't want to incur the wrath of the collected VOD enthusiasts.H2
Bill1703
04 Jan 2017
Re: My Top 10 Stock Tips for 2017 " ... I struggle to see the investment case for VOD, I sold a year or so after the Verizon deal because of lack of visibility on earnings, there was a lot of hope in Project Spring but not much sign of pay-back.... Forecast earnings for 2017 to 19 below are well short of dividend payments... Maybe it is a bid play .... What am I missing?"HE - the key thing (IMHO) is that reported EPS are intrinsically misleading. There are huge annual amortisation charges on the massive intangible asset base, given the nature of the business (spectrum investment, etc) - accounting rules dictate this treatment, yet these are entirely non-cash. I am always reluctant to say, "ignore earnings", but with VOD I think you can say it with some confidence.So you have to value it on cash generation (gross and net) - I believe the market is happy to accept this - and the profile here is very different. VOD currently trades on EV/EBITDA 7.0x (historic), falling to much nearer 6x this year - towards the lower end of the historic range, and at a material discount to both most peers and the market. The issue for dividends is therefore not earnings cover - however, the lack of free cash flow cover has been more of a concern... I myself have cautioned on this in recent years, though a divi cut has never looked imminent, with management clearly committed to it. But this is increasingly an historic issue, driven (mostly) by the intensive Project Spring investment, which is now coming to an end - FCF is forecast to rise sharply in the current year, and probably grow from there, albeit more gradually.So the dividend actually looks more secure than it has at any time post-Verizon, which makes a yield well over 6% increasingly compelling (albeit this may fluctuate with FX on a now-EUR-denominated divi). There IS a bid story, but not one to bet on IMHO - most obviously the long-mooted full tie-up with Liberty in Europe, which could deliver humungous synergies... but they have looked at it and backed away, with deal structure an obvious sticking point. The investment case for 2017 is simple for me. It spent most of 2016 (and before) sitting around 230-240p, which I argued consistently looked 'fair value' to me - but then slumped to ~190p on the Trump bond-proxy sell-off, and has only clawed back to 200p. All being well (as always!), this year will likely see confirmation of the big (FX boosted) divi and big FCF improvement with lower capex - with debt levelling off for the same reason. Every chance the market will then (have to) reassess a ~6.3% yield and 6-6.5x EBITDA as too conservative.A recovery to 230-240p - my central case - gives you 15-20%, and up to 25% on a total return basis with the divi. Plenty IMO... in a market unlikely to deliver anything too dramatic after a very good 2016 overall. A return of serious bid interest would be a (big?) bonus - but I don't think you need it for VOD to do very nicely on its own.
Hydrogen Economy
04 Jan 2017
Re: My Top 10 Stock Tips for 2017 BillThanks, always interesting to see other ideas. I hold ITV and looked at Capita over the new year break, I think it is decent value so likely to buy shortly. I think Braemar is a decent Company, having previously held. I have had cause to use their technical services and found them to be professional and experienced. I will watch for now and may buy in soon.One question, I struggle to see the investment case for VOD, I sold a year or so after the Verizon deal because of lack of visibility on earnings, there was a lot of hope in Project Spring but not much sign of pay-back. Forecast earnings for 2017 to 19 below are well short of dividend payments and growth looks like it will take some time before divided will be covered.Maybe it is a bid play, but I never invest on that basis - I like performing companies with good valuation and if a bid emerges so be it.What am I missing?EPS 5.23; 7.37; 8.89DPS 12,6; 12,8; 12,2Good luck to all in 2017H2
Bill1703
03 Jan 2017
My Top 10 Stock Tips for 2017 Having perused a few of the usual annual newspaper stock tip lists, I thought I would amuse myself - if no-one else - on a cold day with my own, virtual selection.Same rules as the newspapers typically follow - equal weighted, valid for the whole year with no switching, and full owning-up at year end! Just hope to do better than the papers usually do... Bonmarche Braemar Shipping Servs Capita Card Factory Imperial Brands ITV Sainsbury (J) Stagecoach Vodafone WhitbreadObviously, some of these are more speculative than others. There is a vague attempt at balance and diversification across the list, though it's probably still a bit too exposed to the UK economy - and hence any further Brexit downturn. Probably inevitable, given my usual bias towards 'value' and aversion to buying into momentum.Talking my own book? Of course... would be strange if I wasn't, otherwise I'd have serious questions to ask of my own (real) portfolio. For full disclosure, I own seven of the 10 stocks, with the other three (CARD, WTB, CPI) all under active consideration - to varying extents.
Broncomaniac
03 Jan 2017
Re: Poor results I just noticed that Lord John Lee sold his holding on 27 October. I guess he wasn't very happy with the results either!
Greyinvestor
16 Dec 2016
BDI news [link] posting this because I think that BMS is following the BDI down. It is, however, normal for the BDI to move downward at this time of the year......
