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Good summary and yes a lot of LTH will be investing some of their dividend with a view to averaging down the value of their holding - me for a start!
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You don't need to pay tax when withdrawing money from an ISA. Withdrawals from an ISA do not count as taxable income. Any interest you earn within an ISA will remain tax-free, as long as you have never exceeded your annual deposit allowance.
It goes without saying that this share remains very undervalued relative to NAV and is also fully backed l by the cash position. Current SP less than 2.1p vs cash of more than 2p and a NAV of around 6.4p.
I have been doing some deep research over the last few days and this is my updated view of how this one will play out:
Apr 29th to May 12th - due to the recent increase in volume, Seed will be buying back A LOT of shares. They can and most likely will buy in excess of 400k per day over this time period. If you compare this to typical share volumes when this share is quiet (500k per day), this definitely has the potential to move the dial on its own.
May 13th - Seed will return circa £2m to shareholders. This is handing shareholders the potential to reinvest c.100 million shares worth back into Seed. Let that sink in. Typical daily share volume of 500k before all the recent clamour, yet investors will have 100 MILLION buying potential in their pocket.
Clearly there is some guesswork involved here. How many reinvest the dividend? Will the directors reinvest their divi? It could definitely be argued that it would be a bad look if Ed at the very least doesn't. Anyhow, even if we conservatively say just 10-20% of shareholders will choose to do so, that would surely be enough to make this one explode. That would be 10-20 million of share purchases across a few days vs typical volume of 500k per dayz with the buyback on top!
May 14th to end of May - the current share buyback will continue buying back shares of 400k+ until they max out the current buyback programme.
June 1st onwards - Ed has the potential to launch the next buyback programme as soon as the current one finishes, with over £4m cash still in the bank. Remember, the amount they can buy is based on the average volume across the 20 preceding trading days. I would strongly predict that volume will be huge in May due to the dividend payment, meaning the next buyback programme can be exceptionally aggressive as soon as it kicks off.
In terms of SP predictions, I do think 3p will be hit here, which would still be quite insulting relative to NAV. Between 4p and 5p is what I would consider a fair price.
Hope this helps and apologies for my previous misread (I thought there would be a sharper pullback before the ascent) but only a fool doesn't admit they are wrong! ☺️
Can I withdraw dividends from my SIPP?
Yes, you can withdraw dividends from your SIPP, but they will be subject to the same tax rules as other withdrawals and only once you reach the age of 55.
Dividends earned within your SIPP are tax-free, but once withdrawn, they may be subject to income tax because they’re then classed as a withdrawal.
https://www.sippadvice.co.uk/guides/sipp-withdrawal-rules/
Dividends are tax free in your SIPP wrapper.
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Just a quick one guys
Some of my seed in sipp
Will the cash get 25% extra from govt
As that's what I get if I pay in cash?
Also I'm 56
Can I just take this cash out?
Not touched sipp yet
yes, and the mkcap is well below the cash and assets value, nice to be in a company that’s cash positive and no debt,
also glad that idiots don’t come on here and say placing soon lol.
they will have to try another way like years and years and bods pay themselves to much lol.
don’t fall for it, you’ll see the ****s come and go but it’s easy, hold on to your share’s.
atb.
Happy to admit I got this one wrong. Was fully expecting MMs to drop the price by the full 1p. That didn't happen. Now we are in a position where average daily volume in March was little over 500k and Seed will be allowed to buy back that many shares every day in May. Intriguing times ahead for sure....!
Well, everyone should do their own research, but... I've just got this feeling in my elbow.
And it's a pretty strong one, (the feeling, not the elbow).
Lol. Why do you say that reefles? I think it will take a decent RNS or so to get it up to 3. Let’s just hope Ed doesn’t hang around for another year without investing in anything.
...this will be back up to 3p by next week.
I'm not sure if he reads lse
I don't think so
I got over 4 million seed shares lol
Regret getting my lad involved but yeah ,he never went fully in like me luckily, although we both happy with the dividend
Laugh
Fair play,
Dividend pay is a nice bonus, your son must be doing very well also.
Is he a member in LSE ?,
Are you invested just like your son then?
Your son is on the ball here and knows a good investment when it’s about.
Gl.
He bought at 1.98 before dividend announcement
Averaging down means buying more at lower price to bring down your average buy price
My son is holding, he hasn't sold any
Tak. very good post and well thought out.
Laugh
If your son bought before divi at 1.98 and averaged down then he hasn’t done as good as if he’d held, he won’t get the dividend on his sells so that’s gone.
Now it’s about the potential future dividends and acquisitions and future high cash flows,
These companies in AIM are rare to find so increase your holdings and hold imho.
What do the next six to twelve months offer? My guess is a another 1p dividend, combined with an escalated share buyback to maintain NAV as much as possible. Ed's likely to announce one or two investments. Results will bring a new NAV (I haven't bothered guessing given all the changes), which will bring lots of discussion. Reasoning below:
The current rate of share buyback provides for 7 million shares bought back a month, lets say at 2,5p a share, which costs £175 000
Three months of buying at this rate brings 10% of the remaining shares in issue in for around £530 000
That leaves around 180 million shares.
Six months of such buying leaves around 150 - 160 million shares in issue at a cost of around £1m - £1,2m (assuming the SP remains below 2,5p.
Another 1p per share dividend would cost £1,5 - £1,6 million.
That would still leave £1,5 million for investment!
I'm thinking that Ed is conscious of the need to prove himself, so it could be a case now of returning as much cash as possible now and relying on the currently zero valued investment portfolio proving everyone wrong in 12-24 months time. A very profitable sale of an investment or two of Ed's doing would provide him with that justification to carry on.
The share buyback means the cash dividend is offset somewhat by the reduction in the number of shares in circulation via the increase in NAV.
Risks? Well, Ed may buy something with our money that we don't like. I've wondered about Northern Leaf and how a £30m investment in which SEED only had a tiny part could be valued at virtually nothing. The current valuation of Northern Leaf is unclear to me (Voyager was around £1,4M at the time of the £5M joint valuation announcement) and it boggles the imagination to understand what went wrong? It sounds like something out of a Guy Ritchie script went wrong from where I'm sitting. In any case, it still isn't clear where all subsequent Northern Leaf pre-IPO money went (there was more than one lot and it was a lot), SEED were not the only ones left in the dark and the ex-CEO has gone underground it seems. So Mr Ritchie, get in touch. It is still a state of the art facility and with the way the cannabis market is going, then it remains an interesting prospect.
There's plenty of other risks (you'll point them out I'm sure), but again, from where I'm sitting, the upside remains glaring with the current strategy in place. Ed doesn't seem disposed to make massive investments as I think, with all the feedback, he's more self aware this year than, say, two years ago. So I'm guessing that any investment announced isn't likely to be our only one. There's likely to be a spread of risk.
Glad I've held. I'd suggest it's a good time to buy. Whatever happens, you're going to get a decent return over the next six to twelve months.
That is the point. it depends on people average and i know for a fact most people average on here is not 2p.
It does remind me of a company called gvc holdings many moons ago. but that depend on ed doing the business. gvc paid special dividend and of course the drop. took a while to go back up but then kept going to new highs paying out dividends. rare but it can happen where by holding you get the best of both worlds given time. i am more for out and out growth but will gladly hold these shares as looks good to me now. but it will take time as with the rare gvc example.
I don't think you stupid
200k shares
Bed n ISA you loose the spread so 10% lost & U pay dealing costs to buy & again to sell
I decided against it on £20k worth
Tax on dividends only 8% I think
My son bought at 1.98 before divi, pure luck, he was averaging down thou
Bar(wick)man - I rolled my eyes smugly at your comment earlier, "Hope most or all of your Seed shares are in your ISA..."
I was thinking, "Yeah yeah, we may be invested in Seed, but we're not stupid." It turns out I actually am. Most of my Seed is in an ISA, but I left about 200,000 shares in another account when I hit the annual limit a few years back. I could have transferred them last tax year or last week. I am actually stupid!
It’s all about the company that’s in a very high cash positive position, I had no doubt I will do well here and a dividend is a bonus, I expect more dividend payments to come .
Share buybacks are the icing on the cake.
Tak shares out of circulation and so higher future dividend, that’s why they do it to make shareholders more wealthy, the board hold shares remember so they get high returns also.
I’m holding and will get my £5k dividend on the 13th May and will be looking forward to future returns. My 5k is going back in to buy shares so sp doesn’t matter to me atm. Atb
Lol. the only way this will work where you do really well is get the dividend and then hold your shares. all this buying at up to 3p and then selling at 2p but getting the dividend is not that clever in my book. nope. get the dividend and hold. of course if you bought in at 2p then great. but i did not see one single post on here saying they bought at 2p before dividend was announced.