Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
To provide investors with a high gross dividend yield and the potential for capital growth by investing predominantly in fixed interest securities.
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Hi Mr Solo, they publish their Fact sheet and there's often a comment about what they've been buying. I think one of the last I saw was a recent purchase of Punch Taverns, Punch Taverns 7.75% 2025. When I last bough it, it's notes, in August the yield was over 10%. What is less easy to see if the small additional purches that Franco makes. For example, one of the bonds he's keen on is Matalan. I bought some this last week with a YTM of 30%. If you look on NCYF site, Sitting Pretty https://ncim.co.uk/sitting-pretty/ they talk about Matalan in detail. So, it may not just be the case that he's swapping high coupons for lower, but he may also add running yield and yield to maturity to the portfolio. There's still plenty of options around. Again, by example, the August Fact Sheet "The only transactions during the month was to roll the Navigator Holdings 7 3/4% 2021 bond into the replacement bond of 8% with a date of 10th September 2025." Coupons aren't all going in the same direction. Along the way he's also going to be picking up consent payment, and bonds that are being called for maturity that will be paying him accumulated coupons and sometimes premiums to par! I have one been matured at the moment, that I bought at sub par, paying 101% of par plus consent payment 0.5% and accumualted coupon.
Just for fun, myself managed portfolio has YTM of almost 70% - not that I'm expecting that.
I'm not sure which direction the shre price is going, hence a toe hold purchase and them monthly buy, but I am confident he could build a high yield diversified portfolio with a decent total return - but that does, in my opinion, come with more risk.
Afternoon Devon!
Does anyone know if NCYF publish details (specifically coupons/ effective yields) on its new purchases and compares these to maturing investments? What I am basically trying to estimate is what is the long-term yield likely to fall to?
Let's say that NCYF held a selection of bonds with an 8% coupon that it bought at £1.25 = a 6.4% yield. Now let's say they all mature and are replaced with a 4% coupon bought at £1 = 4.0% yield (obviously!). Assuming all other things equal, the level of income would fall 37.5% from 6.4pps to 4.0pps.
So when we see NYCF say that it is not sure the level of pay out can be maintained for the longer term we need to see what the currently held investments are being replaced with. Does anyone have a handle on this that they're willing to share?
Guitarsolo
I topped up today at 45.8 .
Hi Mr Solo, long time!
Opened a small position this morning, I'm planning to use a low cost monthly fundction my brokers offers going forward to build a full position.
I may buy a lump, rather than a toe hold, if we reach 45p as lth position.
I noticed that telling phrase as well. Obviously for "we" long term holders there will be good times and bad. The actual yield here is very good at the moment. I originally bought in at just over 61p, but have kept adding a few to bring it down to 57p, Anyone buying in now will get, for the time being at least, an excellent dividend. If anyone actually got in at 27p back in March, they will very happy indeed. My last years dividends have given me a 7.6% yield. Even if they made the dividends all the same instead of increasing the final dividend, I would still be getting 7 percent.
In my quarterly dividend investments, NCYF come seventh out of 70 for the yield I actually receive. Most of the higher payers are loan companies which are a bit more risky, so I think we should be happy with what we have here. Hopefully they are covering themselves with any warnings they give.
Not much happening on this discussion board, but here goes just in case.
I've been a long term holder of NCYF for the divi for several years. Just read the results summary and was initially very pleased to see EPS has risen to 4.59pps (from 4.49p). This is important as it arrests several years of declining EPS to the point where the dividend was barely covered. Adding 10bps to the EPS (whilst increasing the dividend by 1 bps) gives a very marginal increase in cover (from x1.01 to x1.03 or something close). It's not massive but is something.
We also know that NCYF has about 1 year's worth of dividends held in reserve and the board has stated it will use it if required to maintain dividends in the short term. Again, this is a strength for NCYF but we would prefer they weren't required to dip into reserves.
But then I saw the following sentence in the coverage:
"The Board recognises that it is not necessarily the case that the current level of dividends can be maintained in the longer term but it expects that in the immediate future, the dividend policy can continue."
Is this the first acknowledgement that the ultra-low interest rate environment is finally starting to squeeze the whatevers of NCYF? I presume this means that NCYF is struggling to replace maturing bonds (or those traded out) with bonds of anything like the same coupon. It makes sense since companies are raising money at ever lower rates these days (e.g. didn't Unilever raise a load at about 2%?). This is going to make it difficult for NCYF to maintain its EPS and by extension its dividend on a 5-10 year horizon, without using leverage which it doesn't seem keen to do (and I wouldn't want it to).
So I reckon we've had the first official shot across the bows to expect a dividend freeze/cut down the line. I know many will say they've said this before but I think this is the first time NCYF has said as much in press.
Franco is going to need all of his experience to try and hold/increase EPS as much as he can over the next few years before the portfolio is replaced with much lower yielding bonds. So don't expect much in the way of dividend increases from now on, probably hold it steady or increase by 0.01p just to keep the record looking good!
Any thoughts from out there?
Guitarsolo