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Good day for the markets so far - usual for vodafone . New week same old ****
Has to be a new ceo fairly soon, first thing he will do is cut the dividend and kitchen sink the problems, will go under a quid and stay there, and before I get a load of shxt back from upset Vod investors have a look at the direction of travel for this company charts wise and more importantly debt wise. They were stitched up by Liberty for the now tanking German biz at an absurdly high price. Telecoms is a rubbish market there’s been no money in it for years, I really think over the next 18 months you will see this rebase at 80/90 p with a 4pc yield. It’s just a pos. plus nobody wants to buy U.K./sterling denominated assets since brexit, the gift that keeps on giving.
Given the recent large holdings taken by two activist investor types, any change of guard will be to reflect their preference, so it would be good to hear from them. If they want to leverage to pay themselves a div then VOD will continue to do so, until it can’t refinance old debt, then the bond holders will be laying down the law.
It’s not in Read’s or any CEO’s hands.
"plus nobody wants to buy U.K./sterling denominated assets since brexit, the gift that keeps on giving."
I don't disagree with that statement, but the real basket case is the EU. The EU has a ton of problems with stress cracks showing everywhere. Italy is the third largest economy in the Eurozone, with political instability far in excess of anything the UK's seen for hundreds of years; The hard right Brothers of Italy are set to take control of the Italian government, with Giorgia Meloni set to become Italy's next Prime Minister. Spain has never properly shaken off the Franco years, with the treatment of Barcelona separatist politicians an example of what festers below the surface. The Eastern Block countries are fundamentally right wing and resistant to being told what to do, which is likely due to their subjugation under Russia for decades.
The EU bend over backwards and relax rules to paper over the cracks, but it'd take very little for the whole thing to break apart. The problems run deep with cultural, language, economic, and protectionist issues seperating the member countries.
Hello fleccy. As you haven't posted for a while, I wonder if you are still happy with vodafone at the moment? Cheers.
I don't really give Vodafone much thought week to week. I look in regularly, but rarely post unless something demands a response lol. I'm not happy with the performance of any of my holdings, but more at annoyance at the market treatment of companies I'm invested in. Lloyds is my biggest holding, BT 2nd largest, with Vodafone coming in third, and all are well below market value in my opinion. Since I don't have any urgency to sell any of my stocks, I'm collecting the dividends and reinvesting where I see the most value.
Out of the three, Vodafone is the hardest to judge, since it's a complicated patchwork of different companies and entities, with Group run more like a hedge fund controlling the different parts. I can't complain too much about Vodafone, since out of my three holdings they continued paying dividends, at a reduced rate, throughout the Covid period.
I haven't got any fears about Vodafone going bust, but I wonder about the sustainability of the dividends with the amount of debt. Vodafone seems to be moving away from outlying markets and also selling Tower assets, probably with one eye on its debt, and focusing on its core European markets.
Fleccy
Valid points, but you forgot the elephant in the room - inflation. Vod hasn't even begun to properly adjust their pricing plans to reflect the current market conditions. At least not on the consumer side. On the b2b side of the business they will move more aggressively whenever contracts are due for renewal. Same is also true for other telco players.
Prices will have to be adjusted by anywhere from 15-30% in the coming 36 month period, unless we get into a kind of hyper inflationary situation in which case the debt will be gone in no time. That would have a material impact on both top as well as the bottom line, but more importantly on the net gearing. This is a huge lever that should be obvious by now.
The question still remains, what is the replacement cost of Vodafone? Its the only mobile operator with a global brand recognition. Right now the market doesn't give a hoot about their brand value. A big mistake.
Lastly, M-pesa (50m+ users) is a gem, which is flying under the radar. It's the biggest mobile financial transfer infrastructure in the developing world. Not to mention the explosion of IoT that is coming our way in the next few years. Think autonomous vehicles, deliveries, connected devices etc. Massive untapped market, where Vod is investing heavily in.
I am bullish and vod is one of my conviction trades.
So glad I got 90% of my holdings out of here & into AV & BP. Not gloating but the point of this message is don't be afraid to switch sides if you are 3 nil down at half time. GL ALL
Agree Gary, i have done well from lgen and aviva, you said a while ago that you sold all of your shares ?