The announcement of national, volume residential builder Persimmon’s interim results this morning cheered the City as both the numbers and comments on the immediate outlook for new housing beat analysts’ expectations and bucked prevailing, mixed sentiment towards the industry.
Further to last week’s article which commented on the difficulty of finding reasonable level of income from cash deposits or government bonds, UK inflation data has been published which indicates a rise in underlying prices that further threatens real (purchasing power considered) income.
Since Bank (often termed base) rate was lowered from 0.5%, that has prevailed since 2009, to 0.25% on 4 August - and the Bank of England’s Monetary Policy Committee has warned that overnight interest rates could fall to zero – savers and investors alike have been reassessing where to place their hard earned cash.
After seeing the Japanese firm Softbank agreed US$32billion bid for what is probably Britain’s biggest high technology business, micro-chip designer ARM Holdings, last month investors in UK listed companies may be wondering what else is worthy of investigation.
This is an article about dividends. The generation of profit is fundamental to equity investment, even though share prices are often driven by other factors. Companies can generate profits without distributing them, but for some investors the distribution is what matters.
In the previous article, I suggested that attending an AGM can help you decide whether to retain a share, sell, or buy more. There may be all manner of questions to ask, but my particular focus was on a company’s strategy, or lack of one, coupled with an assessment of whether the company is sufficiently market-orientated. In this article, I want to provide a few illustrations, drawing upon my personal experience.
There will be more than one answer to this question, but it becomes particularly pertinent when the investment begins to look like a mistake. Some shares are bought on momentum and if that continues, fine. Some are bought for dividend income and if that continues, fine. But some are bought because of expectations about the business itself and if those expectations are not met, even though the business still seems sound, the fault may lie with its directors.
For shareholders, the board of directors provides a company’s management. Executive directors are there to carry out the board’s wishes. Non-executive directors (NEDs) are there to keep what should be an independent eye on management, principally on behalf of the shareholders, the owners of the business. But it doesn’t always work like that.
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