Member Info for BlahBlahDoh

Hi John. Short answer is no. But you can derive a VERY ROUGH idea using a ratio between the adjusted relative cost of future dividends and the current share price.

Stripping out the special dividend gives dividend costs of £510m and £310m, totalling £820m. So the ratios are 510/820 and 310/820.

Applying the current share price of 1473p gives prices of 916.13p for the Pru and 556.87p for M&G

The whole point of the split is to release hidden value though, so you might expect the market to value them in a completely different way to the crude and laughably simplistic one given above. Perhaps someone has an alternative suggestion? Also, the massively reduced future yields puts an unnecessary dampener on the whole affair, imo, which could well act as a brake on any SP gains.

In simpler terms: yesterday we got a 16.45p interim dividend, but next year we can only expect about 12.96p. Slap in the face with a wet fish, anyone?

Haha already spotted a mistake - M&G base will be £310m, not £210, so total new base is £1060, 78.8% of 2019.

The Analyst presentation confirms dividend details. Expected dividends across the two companies will see an increase of 5% compared to last year, totalling 51.82p, consisting of yesterdays 16.45p payment plus M&G dividends totalling 15.77p and a second interim Pru dividend of 19.6p, all paid in May 2020.

The presentation doesn't mention it, but from elsewhere we know that part of the M&G dividend will be a special, one-off payment. All of the planned dividends effectively replace what would have been a final dividend. The Pru dividend will be declared in US dollars from now on.

The real shocker here though, is future dividends. For the Pru these will be based on only £750m (out of a total of £1345m being paid out in dividends this financial year) - i.e. only 55.8% of the old company's dividends.
With M&G, the base will be this years payment minus the special dividend, i.e. only £210m, or 15.6% of the old company's dividends.

That appears to mean (correct me if I'm wrong) that overall, the dividend base is shrinking from 2020 to a mere £960m, or 71.4% of the previous year, a radical DOWNWARDS rebasing of a gigantic 28.6% !!!!!!!!!!
I'm surprised this has not yet made headlines, and they've gotten away with the totally misleading "sweetener" one instead.

The split effectively transfers the annuity book anyway, to the new M&G, a smaller company. That weakens the judges argument somewhat, but not completely. A relatively minor issue, and it looks like we have to sleep on it for a year or so. I guess they are keeping the courts free to deal with the outlaw BoJo? (@:

Both M&G and Rothesay are appealing against the High Court’s decision to block the £12bn transfer of Prudential’s annuity book. Rothesay said "The appeal is unlikely to be heard for several months":
https://uk.reuters.com/article/uk-prudential-rothesay-appeal/prudentials-mg-to-appeal-judgement-blocking-annuity-transfer-mg-cfo-idUKKBN1WC12X?rpc=401&

https://www.professionalpensions.com/news/4005366/rothesay-life-appeals-court-block-prudential-annuity-transfer

"Cannot see any negatives ". Perhaps the blindingly obvious possibility of trouble in HK on the weekend has damaged your eyesight?

Having said that, a lot of PI's, institutions and journalists will be catching up and mulling over the Pru situation on the weekend, and this could see some buying next week - the split date removes uncertainty, and if that attracts institutions there might be sustained buying up to 21st Oct.

Quite true Jatw, and the slowdown in China is another factor, but still, the market's pessimism over Pru's prospects has hardly been borne out by business results since 2014. In the event of an end to the bull market, perhaps Pru have more defensive potential than most due to the fact that they are already marked down so much?

Anyway, like you say, in less than a month it will be a different ball game, a game of two halves!

Apologies, the first interim already due is 16.45p, not 16.75p, and it is due today actually. Dates for the other dividends reported by Reuters are unclear.

Yes, the expected special M&G dividend works out at 3.85p per share, but they have also announced expectation of an ordinary dividend of 11.9p (by my calculations, based on £310m)

Also, Pru appear to have announced expectation of a second interim dividend of 19.2p, presumably in addition to the first interim of 16.75p already due?

If true, the total dividends exceed 50p, more than last years total when we are only at the equivalent interim stage.

https://uk.reuters.com/article/uk-prudential-m-g-demerger/prudential-mg-to-spend-350-million-on-october-split-idUKKBN1WA1Q2?rpc=401&

"we are 10 years in to an equity bull market"

That's an interesting observation, because Pru rose sharply for the first half of that bull market, but on today's price has stood still for the second half, a period during which it has consistently improved financially. Arguably Pru's share price has been falling behind it's value, compared with the rest of the market, for five years? From a forward-looking point of view, the market saw tremendous prospects ahead for the PRU in the 2009-2014 period, and then turned sour on it from then onwards.

Better than nothing, but percentage growth figures alone seem more a selective way of accentuating the positives than determining value. Raising revenue from 1p to £1 gives a huge percentage increase, for example, but if it cost you £1000 to produce that revenue, then the value is dreadful. If you could extrapolate the revenue growth into the future you could find the point in the future where the actual revenue (rather than the percentage) exceeds the costs. You could then make a judgement of the value (in terms of share price) by the amount of time involved.

The question was obviously slightly tongue in cheek, but I thought a serious answer might provoke discussion. The trouble in HK on Sunday once again provoked a SP retreat on Monday, just as predicted. An independent international body might be able to help resolve the situation, but the Chinese side would be unlikely to agree to such an intervention. Stalemate.

By contrast, Trump's treason allegations, and the lawbreaking antics of his outlaw buddy BoJo, seem to have had remarkably little effect so far beyond a slight bounce in Sterling. Brexit uncertainty seems to have killed Thomas Cook, but Pru are far less vulnerable, and far more prone to the unpredictable international consequences of Trump's irrationality.

The potential for QDs generally has been there for decades, it's a given. QDs are only part of Nanoco's range of patents and materials, their main competitive advantage is (ironically) in scalable production. The problem for Nano investors is financial not scientific, as they have found extreme difficulty selling anything in any quantity for years and years and years. They have done several significant deals though, and come close more than once, so there is reason for hope. I believe that another deal is likely, eventually, because of their track record, but don't expect anything interesting from management in the meantime, they are poor communicators and sometimes seem almost alienated from their potential markets.

Hello, anybody here? The Week this week says The Times tipped your punt:

"This Venture Capital Outfit invests in "sophisticated"digital businesses, including fintech firm Revolut, consumer reviews website Trustpilot, and chipmaker Graphcore. High growth and expanding, yet "unloved". Buy."

Why's it so low, then. Zombie attack anticipated?

"Value is subjective" Is it though? Value is an evaluation based on measurement. Subjective means based on or influenced by personal feelings, tastes, or opinions. They seem like opposites. The expressions of so-called "value" on here seem to be based purely on gut feelings, and vague "research" which seems to involve no facts or figures whatsoever. Terms like "innovation" and "momentum" are mere buzzwords which don't differentiate the company from any other, and they do not help to determine value. So probably best to stick to terms like "I guess", "I'm just taking a punt" or "I have hunch" rather than pretend you have done any calculations, projections or research to work out potential value. To decide whether there is value here you need to have at least a range of possibilities about when it will breakeven, assuming it will not be perpetually loss making.

Timing is tricky DT22, with the split due at ANY time within the next 102 days. I can't tell you the bottom, we may well have already passed it, but I know others here have said they are buyers at 13. Todays price is well below your average, so maybe consider drip feeding your funds in before it's too late?

Otherwise, I'd say watch the Hong Kong situation - the share price has correlated very well with trouble there over the last two months, so that could provide you with a buying opportunity. The latest fall followed a big protest last weekend, for example. Having said that, I hope that things rapidly improve there, and an agreement can be reached which benefits all - sorry!

Also Trumps further tariff increase on $250 billion of Chinese imports (from 25 to 30 percent), originally set for August 23, is now planned to move from October 1 to OCTOBER 15. Assuming it goes ahead, that will probably trigger downward movement across the markets, with Pru affected indirectly through it's large holdings. Subsequent Chinese reaction could also prompt a (dis)advantageous drop. Look out for the new theatre of trade war with India too, another potential source of deliciously exploitable market turmoil, fear, and high anxiety.

Good luck!

https://www.fool.sg/2019/09/18/3-reasons-prudential-plc-could-be-a-great-stock-to-buy-now/

"long-term investors could be salivating at the prospect of picking up shares of the insurance company at a historically low valuation"

People talking about "value" here make no attempt to value the company at all, in terms of revenue, profits, dividend, competitive advantage, or any other measure. Unless you can estimate when it will make money, and how much, it doesn't seem sensible to talk about value.

But the Indonesian economy is only about one eighth the size of China's, and growing at 5%? Great region for the Pru, world's third biggest democracy, but in perspective it isn't the main focus.

The Hong Kong situation can be viewed in black and white terms: full democracy and representative government backed by accountability and the rule of law, versus communist aggression. The former would potentially signal long neglected reform in mainland China, the opening up of it's markets, and possibly a new world class stock market or two. The latter could lead to the ruination and desertion of HK, a brutal decline for the Chinese economy, and a massive shift in Asian finance.

In reality something in between will happen, but it's difficult to see what. HK is treated internationally as a separate economy from mainland China. The HK stockmarket is bigger than London's, and 75% of the money raised there is for Chinese firms. The 1500 multinationals in HK, including the Pru, must be watching the protests and the Chinese response with increasing nervousness, with Singapore as Plan B. That switch must be a real possibility for the Pru now, unless there is a dramatic improvement? If things get worse, the split could be delayed.