Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Spindler,
Surely the value of the Thai business is already built into the SP ...so..when the value is distributed that value disappears and the SP will deflate accordingly.....just like any other ex div situation
You cannot have the cash dividend in one hand and the continued value of the business (in the SP) in the other
So..it "appears" that they intend to consolidate the shares in order to reduce the number of shares and therefore increase the share price again after the ex div drop ...which would artificially deal with the fact that 5 billion has left the business
Rosewall
You are spot on.
Some Slater Walker companies used that trick many years ago, then a few other listed stocks, the largest of which at the time was Lucas, no pensioners ever benefitted by investing in their own company, to my knowledge.
The old adage of keeping your income separate from your capital has never really been disproved.
Tesco has been very much range bound since around February. Buy around 2.02p and sell above 2.37p
If we break the 50 dma we will test the lower end of the range again.
200-Day Moving Average 224.47
50-Day Moving Average 220.24
20-Day Moving Average 228.09
10-Day Moving Average 226.50
I have only ever been involved with one share where the sp rose as a result of a buyback. Most, such as LLOY, simply depress the share price. I find it shocking that a company cant find any better way of investing shareholders funds. I know the theory is good but I find it rather like flushing money down the loo.
Thanks Rosewall, makes sense and I thought as much.
The pension shares I'm thinking of are company shares awarded as bonus or profit shares and kept, so not strictly part of a pension.
It is interesting that Tesco is not going to do a buyback scheme like a recent one by BP. Some smaller shares that I have come across have utilised this idea for good results.
I wish I'd sold last week ..
Gavster
The pension fund is an independent entity and have rules in place to say what investments can be made. As for the Tesco pension fund investing in Tesco then, unless the law has changed, it is a no no. This dates back to the robber baron Robert Maxwell.
Spindler
Fwiw, I think fund managers are holding this back as they slowly drop money in. They know the timeframe so can take thie so in any direction to suit their agenda.
The recent trend certainly supports that.
I have calculated the money due to me in February and will use that capital before payout to buy more shares. Just a matter of timing. Although it has not been reported, after any share consolidation I can see the yearly dividend to be adjusted accordingly.
The running cost of the Pension fund should be reduced significantly too.
May have my rose coloured glasses on but lots of positives here despite the unraveling from the EU.
Legal and General are in charge of the pension fund, but if I was in charge of Tesco I would want a significant part of my 2 billion investment into the pension fund to be spent on Tesco shares, thereby putting buoyancy into the share value.
I do not know if there are rules against this or not but I have heard of companies that have as part of their pension fund an investment in their own company. Anyone know if this is in anyway part of the plan.. ? Or not ?
Can someone wiser than me explain the drop in share price this week ? If i understand correctly TEsco will have the proceeds from the Asia disposal in the bag circa Friday....they will then make plans Jan and Feb about where the proceeds go.....that's one huge chunk of change they will have in their account. The suspicious part of my mind is wondering if the market is up to shennanigans to keep the price down so they and their mates can get onboard prior to this share EXPLODING upwards ! regardless of share consolidation/dividend mechanics just the contribution to the pension deficit is one big fuel tank of propellant that most companies woud sell their grandmother for.....IS this share about to take off I ask myself ? Learned views greatly appreciated ?
Stuggling to understand why you would sell with a decent dividend on the way.
Rosewall
I just think they have misinterpreted the share consolidation comment in the RNS.
Ilike
And where is a share buyback mentioned?
Is there a stock buyback too, greatttt. Actually hmmm don't like stock buybacks in most cases, hardly any company buys stock at the right time...
Thanks Leas .
21% yield seems a lot you have to minus the amount they're going to use to buy back stock too!
reedy
Approval is expected at the general meeting on or around 11th February and if agreed dividend is to be payed on or around the 26th of the same month.
Perhaps have a read of the second RNS headed condition of sale.
When is the qualifying period for the special dividend?
Hey barchid indeed misinformation is rife. Interesting ref the div you mentioned, makes me think I should do something about my tesco shares, I've two thirds in isa one third in trading account, looks like I should sell from non isa acc, sell something out the isa and buy the Tesco back... Might be worth a little calculation see if the trading fees and stamp duty worth the saving in div tax, atb
Thanks for the wishes Chris, same to you in these unusual times. Good question ref fair price to suppliers and growers. When it comes to rewarding UK growers fairly tesco in the past 8 years has rewarded farmers better than many, if you have a direct contract with them, you've had a better price than the market average. Of course going slightly further up the supermarket price point, waitrose rewards farms well as does coop and sainsbury to a degree. Aside from that Farm shops often struggle though, despite high prices they don't always cover their costs, they could benefit from a bit extra trade to be fair. Another good point with farm shops, certain items they sell may be better for your health, slow grown, solely pasture fed lamb and beef for example,
Tanx Dadean for that response.
Wishing you and all farmers and UK entrepreneurs the very best of luck in 2021.
BTW, I'm actually happy to pay more for UK produce but somehow it's the intermediates that seem to benefit and dont pass on the fair share to the original producers. Is there a way that consumers can be assured that Tesco and other supermarkets respond to give farmers a fairer proportion of the final price charged?
For me I winch when I see the ridiculous price of milk and fresh vegetables... we all know that these are loss leaders for the supermarkets but I'm sure they really pass their losses back to the farmers.
Iam holding tesco for the long term so the special divi I will just reinvest hoping the 51p goes back on the share price in the next few years well here's hoping .
dadean
Thanks for that clarification, sadly the animal welfare lobby seem to continually put out misinformation, it is a sensitive subject to many and deserves reasoned thought, not hyperbole.
What you say about Macdonalds is something I know a little about & you confirm my own information.
SP wise I suspect that once the special divi is paid more buyers will appear as the way this divi is constructed is similar, I believe, to the way Vodafone did theirs upon the Verizon disposal & PI's plus net funds like oeic's were subject to heavy tax, I certainly was in Vod, but if you hold in an isa or sipp it is OK.
If you are a high rate tax payer you wouldn't be buying Tesco now to pay tax on the divi at your top rate and to carry forward the capital loss (if you can), at a much lower rate.
Supposed to be around 50p I believe, way more than interm and full Yr, 5x more near 21% yield
Gosh Friday was another down day back under 230p , this ship does travel in a narrow channel, never gets cheap enough to warrant buying more never high enough to warrant selling,