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Will be interesting to see the market reaction to these results. So far I’ve seen headlines ranging from ‘Vodafone beats revenue estimates’ ‘Vodafone results in line with broker estimates’ to ‘Vodafone revenues decline’

The truth is that revenues are still growing but at a slower rate and they are still targeting the same reduced FY results.

Steady as she goes as far as an update goes and I’ve seen similar updates/results push the SP in opposite directions!

robleo - looking at around 107p at the moment, but may adjust that depending on market conditions. Certainly won't be holding past that as markets starting to look a bit toppy. May even sell some or all at 100p as that's probably going to be a big area of resistance, and I'd rather bank some profits in the next week or so before earnings seasons starts in earnest as it could be a catalyst for big market moves in either direction.

lucky - the BOD will have seen what happened to Direct Line yesterday when they cut their final dividend and will no doubt be even more wary of messing with the divi

Meh - Old news. I watched the interview on Bloomberg yesterday. They bought in Dec 21 and sold out a few months later at a profit.

I sold out Q1 last year as they weren't making any substantial progress on mergers/sales, and with rates increasing M&A was going to be dead in the water for a while so made sense to bank profits at top of trading range. Bought back in a few weeks ago as I think the drop was overdone. I won't be a long term holder - just looking for a little bounce above 100 to bank some more profits and move on....

No way VOD are doing a rights issue. Only companies with serious cashflow issues do that like housebuilders/miners in 2008/9 and more recently Credit Suisse. VOD are nowhere near that. If you look at the balance sheet they have ample liquidity at the moment.

As for the buy backs, they are buying shares to repay the MCBs. They effectively borrowed money at around 110p and they will pay it back by buying shares at 85p. Sounds pretty smart to me.

Robleo - oh yeah, forgot about that. I was just observing price action, not ramping and I was right!!

Unfortunately I am nowhere near as confident now as I was this time last year, as the only thing I can see brewing is my tea!

Something has got to give at some point as telecoms are now as essential to everyday life as electricity! Last few years have been horrific for telecoms with increased capex and falling prices. It can't and won't continue like this - the markets will correct in some way.

I have no idea what that correction could be. Maybe existing telecoms companies will start making money again once they've completed 5G capex or maybe some will merge/get bought out/go pop so there will be less players with greater cost efficiencies and less willingness to race to the bottom on prices.

It's either that or associated industries see value in telecoms for selling their other higher margin products and either start making acquisitions, or replace the existing incumbents altogether with their own or different tech like Starlink from SpaceX. Companies like Tesla and Apple are worthless without connectivity, so it will be interesting to see what they do.

So many unknowns and possibilities. Long term VOD could be worth a lot more or go the way of Blockbuster and Kodak as the tech becomes outdated. That doesn't seem a possibility at the moment, but AI and Quantum computing is advancing at an exponential rate and I'm sure in 5 years time there will be plenty of breakthroughs and new tech that we couldn't even imagine now.

I'm only looking for a bounce from current levels and wouldn't want to be a long term holder as their future is by no means guaranteed.

7th according to that list Robleo - need to put a bit more effort in mate!

Still can't believe I'm 5th on the list seeing as I shorted it over the summer, although unfortunately I closed that one waaaay too early!!

Markets are a bit all over the place at the moment. So many push and pull factors.

Support has just about been holding for VOD which is quite comforting seeing as lots of other shares have got smashed in the last couple of days, although it's right on the lows at the moment and it could be a quick race down to 78/80p if it breaks.

So am I ramper then?

Best get into the spirit of it then I suppose....

Just doubled my holding. Looks like the market has finished off pricing in all of the bad news and have probably overdone it a bit. Looking very oversold on the chart and there's a good chance of a bounce sometime in the next few weeks as this price is bound to attract some bargain hunters, and the appointment of a new CEO promising to deliver the earth and shareholder returns will no doubt get people very excited.

Still very risky as although a dividend cut and further drops aren't my base case, they are a possibility.

Agreed Poker - especially at the moment in the US. Wild and dramatic swings based purely on sentiment. Look the massive rally we had in July/August - all because the markets latched on to and misinterpreted one thing Powell said.

Next week is going to be fun. US inflation figures, BOE and Fed meeting. Markets currently look poised for another big move, but impossible to say in which direction, if you knew the data in advance. It will all be down to interpretation and sentiment and will probably result in a move which goes way above or below what fundamentals indicate current prices should be.

S&P in particular is very interesting. On the daily chart it's been in an uptrend for 2 months and has bounced off the bottom support and moving towards the top of the channel it's been in. Pan out to the weekly chart though and you'll see it's still in a downtrend and is heading towards a line of resistance that it hit a couple of weeks ago again.

Charts are indicating a big move, but the direction will be dependent on the interpretation of all the news next week. I'm leaning towards towards a big santa sally that could last until early/mid Jan, but not going to bet the farm on it and will be ready if it swings the other way.

Dodgy - technical trading is all based around one thing - price action, and price action is determined by and is an expression of current sentiment. Fundamentals may play a part in the current sentiment, but not always.

Charts won't make an SP go in a certain direction - the current sentiment will. News always plays a major role in sentiment, although it's the reaction to the news that's drives the price. Charts are useful to provide a framework of where the price might go, once the direction is in place. They are a graphical representation of current price action and sentiment, and can give clues as to where sentiment may change to give you good entry and exit points.

Fundamental analysis is also very useful, but you can do the best, most detailed and accurate fundamental analysis of a share to determine what you think the fair value should be, but until the people buying and selling have done the same analysis and come to the same conclusion, then there's going to be a mis match between fair value and current price. Sometimes the two things even out and meet, but that can take years, and if the fundamentals change then the share price may never get to your assessment of fair value.

I like to use a combination of both as it can be very dangerous to get too closely fixated on one in isolation.

I wouldn't copy Buffet's moves as he is a victim of his own success. Berkshire Hathaway is enormous and has severe market size/liquidity issues. They can't make any significant investments without it effecting the share price, so their investments are a mixture of significant investments in larger companies where they can build up a meaningful stake, but may not offer significant returns, or insignificant investments into smaller companies that offer significant growth.

The mind boggles at what that man could do with a £1m over a 5-10 year period though where he wouldn't be restrained by market size/liquidity concerns.....

Robleo - this year has been rough for most buy and hold strategies, but the years before that were awesome - you just need to be invested in the right places. The FTSE 100 may have out performed in local currency terms this year, but on the whole it's a pretty crap place for a long term buy and hold strategy and there's no sign of that of changing. It's full of cyclical, old world companies that don't offer much potential for growth. The UK does produce great companies, but as soon as any of them show any signs of delivering outstanding growth over the long term they get bought out, usually by US companies. Arm Holdings is a classic example. World leader in semi conductor software design that's used by all of the main players and got snaffled up by NVDIA a couple of years ago.

I don't see that trend reversing any time soon so you're not going to see massive growth in large UK companies. UK smaller companies is a different story, and if you have the stomach for it and the necessary time horizons to ride out the dips, I can see that sector continuing to produce strong results over the long term, but you really do need a well diversified approach.

The one advantage larger UK companies do have is that they pay good dividends and trend fairly predictably. A swing trade approach of buying the dips, maybe collecting a few dividends and selling out when they get to the top of the trading range can produce very good results, although it is hard work, and you can't afford to fall in love with a share. Don't obsess with picking the absolute bottom or top as you can only do that in hindsight, and be very, very careful about going too heavy on one share as you won't always get it right. Sometimes you have to take a hit, especially if the fundamentals change. I've had to take a couple of painful ones over the last couple of years, but it was worth doing and I more than made the money up elsewhere. Losses are bad, but so is having dead capital.

I can see things continuing to be choppy for a while so I will be taking profits and looking for opportunities with the money I use to trade with, meanwhile I've got a few tech/crypto long term buy and holds, and every week I'm ploughing money into a portfolio of funds in my pension. The last few months all new money has been going into UK Smaller Companies as GBP has been battered this year making UK companies attractive, and buying USD companies with GBP far less attractive. You can avoid the currency issue by using a spreadbetting account, but tbh the costs are so high now it's not really worth it, plus you get slaughtered on dividends with the with holding tax and currency conversion.

That's my plan and it's working, but like you said we are all very different. I'm still working and accumulating, and the plan would be different if I wasn't.

You can use either book value or net book value to base your investment decisions on - I was just explaining the different terms and how they are calculated :)

Thanks Robleo and Android. Tbh when I started my analysis I was convinced VOD were stuffed and was expecting to work out a price target for entry much lower than current levels, but I surprised myself looking at the numbers in more detail. Don't get me wrong, this could plummet from here as fear has set in and it could go into an unwarranted death spiral like lots of other shares have in the past and later rebounded. Everyone seems to be pooing their pants about net debt rising and profits falling, but when you dig deeper at the moment it's not that bad.

I was convinced that they'd slash or stop the dividend, and whilst this still could be on the cards, I'm leaning towards it not happening. This is an income share, and if the div gets cut the SP will probably plummet. VOD financing arrangements are complex, and in part rely on the dividend and SP for things like the MCBs. Another slash in dividend and SP could really cause them problems with future financing. Short term they aren't anywhere near a liquidity crisis and can service their debt without cutting the dividend.

Similarly there's no way they are going to do a rights issue/placing/debt for equity swap based on the current financials and outlook. Only companies with severe cashflow issues do that, and VOD are very good at managing their liquidity.

Yes there are macro headwinds which could make things worse, but I think that fear is getting overdone at the moment. Much to my surprise the EU sorted out their potential energy deficit this winter which could have been catastrophic, and energy prices are tumbling. That could bring down headline inflation figures pretty swiftly in the next few months, and interest rate expectations are already slowing down.

VOD had quite a few exceptional costs and drags on cashflow in the last results, but underlying operating profit was actually higher. The spectrum payment of 1.7bn was a big hit on results that won't repeated in the next 6 months and those costs are set to taper off in the next year or two. If EUR/USD remains at current levels or higher, then there will also be a reduction in net debt in the next set of results due to the hedging/derivative positions. Results will probably going to be around the same steady eddy levels they've been at for a while, and not the slide into oblivion that's currently being priced in.

Anyway, I'd better get on with my proper work now. Was slightly trigger happy this morning and have a little bit of skin in the game now but a bigger order at 80p. GLA.

Book value includes goodwill and intangibles, whereas net book value doesn't.

Subtract the intangibles from the shareholder equity and divide by the shares in issue and that's where the 0.13 NAVPS (it's actually 0.136)

I had written off VOD as a complete basket case after reading this in the Nov results:

"Free cash flow was an outflow of €3.2 billion (FY22 H1: outflow of €1.0 billion) reflecting lower Adjusted EBITDAaL and
higher licence and spectrum payments in the period"

and then this.....

"Net debt increased by €3.9 billion to €45.5 billion (€41.6 billion as at 31 March 2022). This was driven by the free cash
outflow of €3.2 billion, equity dividends of €1.3 billion, and share buybacks of €1.0 billion used to offset dilution
linked to mandatory convertible bonds"

It makes it sound like VOD have a big black hole in their accounts from falling profits/rising costs/paying dividends that needed to be filled with debt so I stayed well clear, but after the recent big drop I thought it was worth a deeper dive into results/accounts to see what’s going on.

The real reason net debt increased is because there was a big jump in the collateral required for open derivative positions. That increased collateral is counted in the net debt calculation. The value of those derivative positions has increased, however that profit is not included in the net debt calculation. The value of the USD bonds are in the accounts at par value, which is higher due to the drop in EUR/USD at the time the accounts were prepared, but they are all hedged, but the value of that hedge is not in the debt calculation. You need to read the full set of results to see this, but the easiest place to look is shareholder equity which actually increased by 0.8bn over the last period. If the net debt was increased to cover a drop in profits/increase in costs/payment of dividends then that money would have disappeared and shareholder equity would have decreased, not increased.

The results are complex and the accompanying statements are somewhat misleading, so it’s hardly a surprise there’s been a panic since they were released and Read was sacked. Tbh I would have sacked him just for presenting those results the way he did, never mind all the opportunities he failed to capitalise on this year.

Don’t get me wrong, I don’t think VOD is in an excellent position and I can’t see meteoric growth any time soon, but the financials aren’t much worse than they were this time last year when the SP was much higher. On a fundamental basis the drop already looks overdone to me and at some point there’s going to be a rebound. Not catching this falling knife now though as I think a drop down to 78/80 is on the cards. I’ll have a little nibble around there I think, although fear could push this much lower if that level breaks. If I miss the boat before it gets there then so be it as the risk/reward needs to be right for me, and fundamentals could deteriorate which would warrant a lower price.

A bit of patience required with this one to get a good entry and yield. Long term support line is at around the £26 level, so I'd be looking to accumulate at around the £26-£27 region.

A lot of the price action in BATS is a pure currency play with GBP/USD. King Dollar has been surging this year but is starting to retrace which explains a lot of the price action this year.

I'm sure GBP/USD will get back to around 1.30 over the coming months, and when it does that alone will translate into a 10% drop in the SP. The rest will come from a rotation back into tech, and BTI is on a downward trend and around 10% off it's long term trend line, so £26-£27 does seem feasible if the rotation and currency moves continue, which they probably will.

I think an 8% yield is about right for a sin stock, which is what it will be at about those levels.

BATS is still my best performing share by a long way. I don't own any at the moment and will bide my time for the next opportunity which will probably present itself at some point next year. The markets would have to get get really carried away with themselves with this risk on rally which is pushing up tech whilst pushing down the price of USD and defensive stocks for it to happen this year, although I am watching on the off chance it does....

Retirement - you’ve got that backwards. The high oil (and other commodity) prices have propped up the FTSE this year. European and US indexes are circa 15-20% off Jan 22 highs whereas the FTSE is down 2% and is one of the highest yielding indexes so is actually around break even ytd in total returns.

High nat gas / electricity prices are killing Europe and dollar strength isn’t helping and is crippling emerging markets with large amounts of USD debt.

Gasoline prices are a political hot potato in the US, but Biden has been playing with fire with SPR releases that were designed to temporarily push down gasoline prices so the Democrats would have a chance in the mid terms. The talk back in April of it being a temporary measure whilst US oil increased production was complete nonsense and they have failed miserably.

The oil market is tight as it is even with the SPR releases. G7 / EU are also playing with fire with Russia. I honestly think Putin is being patient playing his oil card and is waiting for SPR levels to deplete further before he cuts back on oil production/exports and sends the price of oil sky high at a time when G7 reserves are at multi decade lows

You'll see a similar correlation with most crypto currencies and growth shares since they both came off their highs in November. It's one reason I don't see the point in crypto as 2 of it's biggest selling points as an asset was that it was non correlated to equities and was an inflation hedge, but the last 7 months have proved to be the opposite!

NIVIDA is the type of company I'm talking about and it is my target list. Huge growth potential, but PE still too high for my liking. I would buy if it got smashed on a significant market retrace though as the potential is there.