Legal & General Share Chat (LGEN)

Trump lackie Rubio allegedly saying this morning deal is as good as done with Iran, heard that before like !

REASONS:

1) Strait of Hormuz will be re-opening / Iran war coming to an end

2) Massive Buy Back in operation here

3) Take Over Speculation will be hoting up like the weather next week in the UK :-)

4) Dividends re-investment period is just around the corner now

Enjoy the ride and the nice weather I say

Bye Bye Bye

“ I'm happier keeping the discussion open to everyone.”

Glad you are all willing to continue to share.

Sometimes the board does go to places it might not need to.

But it always comes back on track.

Some of the posters on here are above excellent.

And we thank you for your time and effort.

When you are sharing just remember how useful some of this would have been to you when you were starting out investing.

Then you will realise how useful we find it.

So much information is available now in seconds, yet people still come on to ask things they can find out themselves ( eg when is exdiv).

So never underestimate how useful your sharing information is.

And some people will watch but never post.

So once again many thanks and please continue to share

“I'm happier keeping the discussion open to everyone.”

…….

Couerdelion,

Fair enough ~ I’ll give you a response here then… 😊

I do consider myself to be a wussy investor but, at the same time, going back to the start of “discovering” house builder shares in 2003, I’ve always been happy & comfortable to be invested in just one share.

And it is something that I’ve pondered about myself, and I’ve concluded that it has to be because I was in business for myself from the age of 23, in firstly record then video film wholesaling from the mid-seventies to the mid-eighties.

Rather than being employed and having a proper job, I mean.

It was a risky, low margin game ~ a 2% of turnover bottom line and then that was only if you got it right ~ and most of my competitors hadn’t survived by the time I sold in 1984.

Up against this, the company was committed to the bank on big borrowings with their holding a fixed & floating charge on the assets along with a charge on my house, and I and my partner were also jointly & severally guaranteed.

Banks are good at belt AND braces.

So, when I considered it recently, about what multiplier of risk was involved with, on the one hand, my company which, in any bad twist of events, could have gone belly up at any time and with everything on the line along with my also being just about the most unemployable person I know (and I’m not being funny there) to, on the other hand, being invested in a company that was/is surely at least a hundred times safer given that it’s one of the oldest companies in the FTSE100 and, arguably (you and Meco would probably have a more informed view on this than me?) the most conservatively managed of all..?

And separate to my investments, these days I do have property unencumbered by mortgage or charges along with uninvested cash reserves (I mean, in the bank not under the mattress) so I’m not as “all in” as I was back in the day.

And being prepared to commit fully to my best perceived investment opportunity at any time ~ which has been the case since 2003 which is when I decided that I trusted myself enough in what I was doing ~ has been very rewarding…

Even allowing for getting it badly wrong in the credit crunch in 2008.

Strictly

Rumpel, to clarify, my view is that spreading risk does allow you to maximise returns but subject to the constraint of a certain risk level. You can make higher returns than the market but only by accepting a higher level of risk. Note also that returns here are dividends AND gains and that this is looking at a multi-year approach to investing.

With regards to management, I probably take a rather cynical view. Particularly with a company like LGEN, where cash simply rolls off the business, the main quality of management is to "not mess things up". Sure there can be potential upside gains - like an good acquisition - which are nice to have but most of the value is already in business here so the key role of management is to keep it there and make a few incremental gains. If they are making a big difference to the SP then there's a good chance it's not a positive one. This, I should probably add, is my private view based on some time working in the industry.

Strictly, no need for a consensus as every investor can have their own risk tolerance. This message board is quite civilised and it's always good to have a mix of views on different points if only to see this as a subset of the wider market. For my views on diversification, I'm basing this on Modern Portfolio Theory so it's not very original. I'm happier keeping the discussion open to everyone.

Courdelion - Just a couple of things from your earlier post. First off, I found that it was a very thought provoking last sentence about “your future fortune to be sitting on the shoulders of such a small number of people”. It’s been said that it’s about mgmt first, second and third but seeing it expressed in that way brings it home. Often difficult for the private investor to make a true assessment of the C-suite as we’re not close enough to know who contributes what to the performance of a business. Is it all the CEO or is the CFO driving it (or, being negative, damaging the business!)

Re: diversification. You state “…not solely a means of maximising returns…” it seems to me that you contradict your statement with your subsequent comment “…accept a lower reward by spreading the risk among different companies”? I don’t wish to be a pedant but just making sure I have not actually misunderstood yourself? The sun may have got to me today!

For me, I would say diversification would normally be the latter in that you’re accepting a less optimal outcome on one measure (eg dividend income) to improve on another measure(s) (eg ‘safety’ of an overall level of income on an ongoing basis).

Ultimately, everyone has their own investment goal plus their own view / assessment, measure and tolerance of risk all of which can change over time.

How about not being able to do the little you are able to do until September in case you interfere with the salmon migration even though salmon have never been seen in the river in living memory. The world has gone mad.

Https://www.thisismoney.co.uk/money/investing/article-15841727/YOU-profit-foreign-predators-circle-home-grown-businesses.html?ico=mol_desktop_money-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.com%2Fmoney%2Findex.html&_gl=1*t804oo*_gcl_au*MTc1NTI0MTU1OS4xNzc2Nzg0ODA0LjIwNjkzMDcxODUuMTc3ODE2OTk2MC4xNzc4MTY5OTU5*_ga*MTkyOTgyNzYwMC4xNzc2Nzg0Nzk4*_ga_C9F47K6NW6*czE3Nzk1MzE3OTckbzM2JGcxJHQxNzc5NTMyMDAyJGo0MyRsMCRoMTY2NDAzMjk1OA..

I was so right I had to say it twice :)

Suf

Some of that bid premium is already showing in the jump from 248 to 264

Suf

Some of that bid premium is already showing in the jump from 248 to 264

Divi-Collector "Any takeover has to pay at least 30%-50% premium above the current price at the time of the bid."

That isn't a hard rule. I own a share doing a buyout at just a 7% premium to the SP. Often there is a bid premium to get things over the line especially if its undervalued.

If its undervalued why sell. Why not wait for it to show through and collect dividends whilst you wait

I view LGEN as a bond proxy with a better yield. The share price might well dip again, as it has in the past,but I think that the general trajectory is upwards. I thought that the Japanese deal was very smart and I would not be surprised if that relationship deepens.

Yet another strong finish much against the norm for this stock.

Beginning to think that while a full scale bid for the company is unlikely pretty hopeful somebody is stakebuilding to have some influence on the direction LGEN are taking in the future.

Trekmadone, I am intersted in some of the FTSE 250 high yielders that you mention. Where did you come across these? Are there sites you could recommend where I can research?

I appreciate meconopsis and others sharing their thinking. As I mentioned a while back I've been waiting to reduce my over-exposure - but felt that anything under 280 was too cheap. With the dividend to come - 269 was enough for the first sale, used most of the proceeds to add to my TFIF holding.

@Crossley - you have a PM

Ive tried to.trade this and it proved a mistake. A bid update could come any time

Im in, staying in and ignoring and flutters

The big cash backed and covered divi, bid interest, high analyst valuations and 15% atnleast discount to all peers makes staying here and ignoring flutters

@Couerdelion - I’m sat in cash for the moment.

I think that MNG and SDLF are as least more attractive takeover targets - and potentially much easier for an acquirer to ingest and get approval for.

@strictlybricks - I completely about the riskiness, but the n my view a change of PM is a certainty and Iran isn’t over yet.

You don’t launch a politically-sensitive bid that will have a timescale attached to it into a political mess. You wait to see who you’re dealing with.

Both - I take your points and I’m still very much committed to LGEN as a company. And/but I’ve got 10 weeks before I’m in danger of missing out on yield.

As I say, I’m here to be made a fool of by the markets ;)

Champagne 🍾 is chilling in the fridge, it won’t be long ….imho

Champagne 🍾 moment

Haha

I worked for Xstrata and was there during the take-over by Glencore. Mick Davis who started Xstrata is now into battery metals. and rare earths. His new project in TIN (formaly known as Cornish Metals) the ticker is TIN. Tin is in short supply and TIN is the largest mine outside of China. Going to do very well as the Government is injecting money into as an important resource that should be nurtured.

Good entry into other tin projects is 1SN which could get taken over by a bigger player which I am also in. Expect good rise there.

But of course LGEN is looking very very good now and should go higher with that tasty dividend. Good luck all.

YAWN !!!

Really…

Nothing is written all over it until the final day mate

I held Xstrata stock I bought in 2008 at £3.90, had £15 written all over it only for Glencore to come along and buy em for £12.90. Shareholders didn’t like it me included.

Xstrata stock hit £30 in 2008.

This is one example

DirectLine is another example that I have been involved

£4+ is written all over it…..The Takeover will prove that…imho

Meanwhile, just sit and relax, add more when possible, collect the dividends (reinvest the dividends)

and when the takeover kicks off, laughing all the way to the bank….happy days.

Approaching!

Evening David,

This is a similar situation that I was highlighting with RELX back around the start of March. The stock was seeing serious downward pressure daily from 2:30pm that almost switched on a sixpence. The stock then seeing huge support from 2:30pm. You could even see how the volumes on the US open was having an effect, when looking at Relx ADR (the US listing), while watching their live price

Yet another afternoon rally, 10 days or so ago this always went down in the afternoon, now it always goes up,I understand buy backs, rumours etc move the price direction, but I fail to see how it effects the timings. These afternoon rallies are observable and consistent, and the opposite of what was happening recently, why is this? I think it might well coinside with market sentiment across the pond.

Should read 100% of the risk and the Government takes up to 45% of any profit.

Better get the bid in before Streeting gets in. He wants higher tax payers to pay the same level of CGT as they would pay as income tax. Seems fair to me. We put the money up front, take 100% if the risk and the Government takes up to 45%. Investors should be falling over themselves signing up to that deal.

“”The Financial Times quoted a US private capital executive as saying that it was "getting pretty real" as far as groups drawing up plans to bid for L&G. "People are spending real money on this now," the source said.””

A bid for L&G could come out at anytime, Don’t be penny wise pounds f00l…imho

Exactly what i said lol

SP drops after ex div not dividend payment!!

Https://finance.yahoo.com/markets/stocks/articles/legal-general-group-touts-5b-120317366.html

Isn't the AGM today?

I wonder if any questions will be brought up re. a possible bid?

Dividend reinvestment is actually helped by the share price staying lower in the short to medium term, since dividend reinvestment is about compounded returns over time. A lower share price means the reinvestment can by more stock, meaning even higher dividend income going forward. There's more than one way of realising "Growth".

What are you on mate ?

If you add the dividends payment on the 4th of June to the current sp,

Current 267pish + 15.67p = 283p

Have a look at the sp history in the last 12 months.

Buyback and selling bit of the business is dressing up for the takeover.

I can see the takeover price is £4+…..Wait & See

Has anyone any idea how the volume of shares bought as part of the dividend reinvestment compare to the volume regularly purchased, and subsequently cancelled, as part of the buy back scheme ?

If a robust buyback scheme does not have much of an impact on share price I can't see what difference the dividend reinvestment would make .....

Doesn't the buyback work on a percentage of trades done rather than if the price drops. So in fact will also buy on a price rise.

The sp will get to £4+.....wait & see

At present there is a share buyback program in place. This will tend to support the share price as the company's brokers will buy on any weakness. I suggest that that will affect the market more than the US opening or closing.....

Some may remember a week or so ago I posted( THESE ALWAYS GO DOWN IN THE AFTERNOON) which I always put down, without any evidence, to the American markets opening and having a negative effect. Things have changed recently and these are now going up in the afternoon. I know it's a big assumption, but if it is the influence of the American markets, are they going up because they know something we don't??

Meconopsis,

I wouldn't disagree with that argument but the market has decided that long term savings has lower growth prospects in comparison to general insurance and prices the shares accordingly. Personally, I avoid those shares as I don't understand the business well enough but I'm happy enough holding as much as 10% in a stock like LGEN for a steady dividend flow - divesting a little when the yield falls and adding when the yield rises - as its cashflows are very reliable.

I'd be as happy as any here if the yield were to drop to 5-6% but a comparison to yields on shares like Allianz is like comparing apples and oranges. LGEN is much closer, imho, to an asset management business than to a general insurance business and that's where I'd be looking for industry comparatives.

Couerdelion - I both agree and disagree with you.

As a long term insurer where long term liabilities are matched against long term investments, LGEN offers less risk than a general insurer like Allianz.

In a rational market, that lessor risk would be rewarded by a higher risk premium. If you ignore Allianz specifically, which does bring in the issue of nationality, then LGEN is intrinsically lower risk than Admiral, but trades as if it were far riskier.

The chances of the market recognising that and closing the gap are slim though.

“I believe the dividend is unsustainable as I have no understanding of LGEN, contracts for insurance or IFRS 17. So I'll blindly keep spouting my crap in the hope of influencing the equally clueless.”

The problem is that blindly spouting it doesn’t make it right.

I’ve done many posts in the subject, but if you head over to Gordon Aitkin’s substack where you’ll find all the education you need.

It’s probably the most sustainable dividend on the stock market because it has profits locked in for the next 10-30 years.

If you’re not interested in learning about it then you’d be better off holding other investments.

But, each to their own. I wish you the best in all your investments.

Morning all. I'm just bimbling along buying L&G on a monthly buy for my SIPP, and re-investing the div as it goes. The yield has been lovely for quite a while now so this unsustainable talk is just going over my head ;0) If there is a bid forthcoming, I'm fairly relaxed about that as well.

Good Morning All,

There are a lot of scared mouse waffle here, Some posters are clearly do not know the company.

They are posting negatively on the hope to influence people to sell so that the sp goes lower….lol

Also if it’s dividend yields ppl are after, and considering Big RISK, consider Petrobras PBR it’s 8% before 15% dividend withholding tax.

Plus you have the lows sp is trading at due to governmental headwinds.

I’ve got VALE owned since 2020 which is another .

I’m on a 11-12% yield due to price I bought at.

Going to be haircutting here soon if it hits 290p and moving to buy a new speed machine 🤣

Https://www.securitiesfinancetimes.com/securitieslendingnews/peoplemovesarticle.php?article_id=228689

Not at all sure about that. Who will buy these companies products if there is mass unemployment. Money needs to be circulated

Well you got the first part right. Ai will make the few mega rich but the rest of us it's well known whats going to happen

DB, yes it's scary stuff for workers but AI is scary all round. We have been warned of massive unemployment and it looks like it's beginning to happen. Someone needs to come up with an alternative plan to unemployment. We can't have millions of humans with talents and knowledge just idling. The trouble is AI is going to make the minority super rich and the majority poor, homeless, jobless and angry. Not a great future for society so we must find a way to mitigate this and we better be thinking how now.

All depends how this plays out. Could be a technology to the benefit of all humanity or just a select few

Makes university a complete waste of time and money though for quite a few now

Not your fault Mike,and I'm not having a go,but what awful picture your post paints, lots of profits for some and no worthwhile occupation or income for others. No wonder societies are stuffed and there is so much chaos.

That's the dilemma for those looking for income. As the price rises and the yield drifts down, when do you decide to look for alternatives and where do you do. But it's not all bad news as you'll get a more diversified portfolio is you are not relying on one stock. And there are plenty of ways to do that currently in the UK market, whether this involves other stocks in the pensions/asset management field - not ideal for diversification - or looking wider afield which may also give you better growth prospects and you can always supplement dividend income with regular divestments if the income is the key requirement. For example, if LGEN is priced at £4, you can sell a few shares at a price equal to 18x the current dividend.

Just to say Cartunehead, you're a bit out of date with TW dividends. 30000 shares will bring in about £1800 pa since the dividend was reduced. I take your general point though.

There's always somewhere else to invest. I look for unloved shares sectors who often become loved again. Can take years, I guess it depends on each persons time line... take Taylor wimpy for example if you purchase 30000 shares the yearly divi comes in at £2200 which is just about what you get here with Lgen for 10000. But if house builders come back in vouge which they will one day theres lots of capitol gains to made as well. Im not recommending anything to anyone just thinking out of the box so to speak... all investments carry a risk.. DYOR

I like your optimism !

A bid of £4 / share sounds great on paper but for me, and perhaps some others, is where would I reinvest the money to secure an income as good as this ?

There is always risk but its rekarive. I cannot think of a safer place at the moment given high yield or high capital growth.

ABDN is where I will be topping up.

CITI like there turnaround. 260p SPT

Position reduced by 0.15%

Im very happy with the dividends and expect the share to rise 2% year on year . This fits perfectly with my retirement plan

Rumours peace deal about to.be done. XI thrown his weight into it

Can’t believe it that the sp is trading @ sub 270p today….ATB

MPO818, Good morning, morning all,

TBH, buying/adding/holding, they are win win situations, if the bid goes ahead then we are looking at

30%-50% premium, plus collecting the dividends. If no bid then we are collecting dividends @8.5% annual yield which is one of the best yield in the market. Once there are multi bidders then the sp will be north £4 easily…..imho

Happy to hold and adding more, will add more on the 5th-June regardless the sp value….happy days.

Speculation about a potential takeover of Legal & General Group (LGEN) has intensified in the financial sector. While the company's CEO publicly rejected outright sale plans, analysts and market insiders note that the insurer remains a highly attractive, self-funding target for private equity and alternative asset managers.Current Market Context and RumoursBuyer Interest: Recent reports suggest US private capital firms and alternative asset managers are actively drawing up plans to bid for the London-listed insurance giant.CEO Stance: CEO António Simões dismissed the speculation, stating that the company is "100% focused" on its current business strategy and not considering a break-up or sale.Market Reaction: Despite the denial, the sheer size of the rumoured interest pushed L&G shares up by over 5% in a single day, signaling strong market belief in its buyout potential.

Licker,

Help us out by explaining the process?

Your ignorance on how bid processes work is obvious

Morning Mikey/all. Nothing much in the weekend papers that we weren't already aware of. In fact, nothing much since the rumour broke last week in the FT providing, I hasten to add, a welcome boost to the share price 😀. My fear for anyone buying on the rumour is that they might get stung by a nettle. I hope not and as they say, where there's a nettle a dock leaf lays close by. AKA, the handsome dividend.

If there is any substance to the rumour, I wouldn't be holding my breath for a bid just yet.

Phyl

No bid.

We havve good news to morrow maybe a bid :-)

Trotsky - ISA would be best, but adding 2x £20K annually is a slow process.

I still work, so adding bits all the time, coupled with occasional property sales means I'll never have everything in a tax wrapper. But we do the best we can.

BTW. my average is more like £2.50 - weighed down by a large purchase in Jan 2022 - just before UKR - Russia war. Amazing just how many people seem to have bought all their shares at the lowest point since covid.

Pete97

I second the lack of confidence in your math. I hope you are not making decisions based on it. It also highlights the errors when saying only large holders sub 230 statements

It's the same percentage profit big or small.

@Pete - I've got 100,000 shares here at the moment and I'd be delighted with £3.50 a share and thrilled if we achieved £4 and would be over the moon at £4.50.

I'd like to see a bidding war actually then we might see £5 😁 ....

I guess it would be nice to have a single bid first though (before we count our chickens) 😁

All I was saying is that a buyout at £4 would be great for people with large holdings and who bought them sub-

230p that’s all I was saying!! The rest was just a stab in the dark, but of if I had 50,000 shares in LGEN at the moment I would be happy with a takeover at £4 in August!

Having said that "... say £40,000 to £50,000 ..." isn't anything like doubling your investment ;-)

If you originally bought LGEN at £2 per share then the current yield on your original investment would be c11% and, if you doubled your original investment on sale, it would equate to c9 years of annual dividends, ignoring future potential dividend growth and IT. Whereas, if you originally bought LGEN at £4 per share then the current yield on your original investment would be c5.5% and, if you doubled your original investment on sale, it would equate to c18 years of annual dividends, ignoring future potential dividend growth and IT.