Member Info for fleccy

The market works in mysterious ways. BP is up today, even though its Rosneft investment has all but gone up in smoke, including the loss of £0.6 Billion a year dividend; Add to that, Biden is organising the release of 60 million barrels of oil from the reserves. In the meantime, Telecom stocks are getting their usual hammering, even though they're unaffected by the war in Ukraine.
There's something wrong in the way the market values stocks these days, with no apparent pricing at a sector level based on actual event outcomes. I blame the momentum algo's, who just action millions of trades per second with no interest in a companies fundamentals, or impact from macro events. If anyone can tell me how a war in Ukraine affects BT's profits, I'll read their analysis with interest, but I don't see any connection myself. Maybe money's coming out of Telecoms, because they perceive better opportunities elsewhere, and maybe I'm thinking incorrectly, but personally I'd be selling BP to buy stocks like BT who doesn't have any apparent hit to profits from this war.
I'm awaiting April, as our Stocks ISA's are fully paid up this financial year, to add more BT & VOD, since I disagree with the market's apparent view.

"Instead, it has prodded Russia into war (twice) and is now trying to drag the rest of Europe, UK and US into a nuclear war."

How's Ukraine done that, by wanting the freedom of self determination? There's no excuse for killing kids, but that's what Putin's war is doing. If he had a heart he would stop the madness now, but it seems he doesn't care who he kills as long as his ideology prevails. Makes me wonder what other atrocities he's considering. Some of the rhetoric, out of Russia, might suggest they're considering tactical Nukes; Unimaginable I know, but I never imagined Putin would invade Ukraine.

"Unfortunate timing"

Indeed. BT up 2.4%, LGEN down 2.4%. Where's the crystal ball when you need it?

''It's the increase in EPS that directly drives the share price up.''

Actually, it would drive the price up in a normally functioning market. It's worked very well for companies in the US. I'm going to bed knowing that i'm correct lol. Someone else will have to keep you company now LTI. Goodnight.

The buybacks help the Directors more than the shareholders. Lloyds should have paid more out in dividends and less in buybacks, imo, and aimed to maintain the level around 70 Billion shares in issue, like they did under AHO.

"''the cotradictions between your various arguments.''

where are they?"

The contradiction between stating buybacks are good for investors, and then arguing that EPS makes no difference to share price; You even used 2015 EPS to make your point. If EPS is irrelevant, then buybacks must also be irrelevant.

"The market determines the value of Lloyds each day.
We will find the new market value tomorrow"

And an important metric, the market uses to determine a valuation, is EPS.

"affect"

Indeed, but it doesn't change the cotradictions between your various arguments.

"It is a return to shareholders - it increases their percentage holding."

But what's the point if it doesn't increase the share price, since you stated that "The market decides on valuation", and you wouldn't acknowledge that the EPS has any affect on the share price.

"'The sole purpose of the programme is to reduce the ordinary share capital of the Company.''

What's the point if the market will just decide the price anyway, in your opinion? You just argued that the market decides the price, irrespective of earnings per share, so there's no point in buybacks if your argument is correct.

"The market decides on valuation"

If we're to assume that you're view is correct, then what's the point in buybacks? Which you so vigorously defend. If the market just picks a number and decides a share price, buybacks are pointless. You're contradicting your own defence of buybacks, since the buybacks are a waste of time from what you're saying. Lloyds may as well just pay more in dividends and forget buybacks, wouldn't you agree?

"From memory I think eps was less than 1p in 2015 "

Actually it was 0.8p, but was affected by PPI compensation. Obviously 2015 didn't have the external macro issues affecting sentiment. Brexit, Covid, and now the Ukraine are having an effect, but I did say barring external macro factors. Obviously PPI didn't affect sentiment as much as other things.

"if you feel confident open a sell position on IG"

I've never shorted a stock in my life, and never will. Shorting and spreadbetting are too risky for me, as I've seen the effects of a short squeeze on investors finances.

"The market decides on a share price - this years eps was 7.5p share price 48p
i hope you took that in"

I don't disagree that the market decides the price, but in the absence of Geopolitical and macro events, the EPS is an important metric for determining a share price. My example stands in the absense of external factors.

"Fleccy,
I'm with Lti here,
I suspect this will be sold possibly to the Chinese, but we will have to wait and see.
I am bullish on BP, it still has a bright future."

I'm not saying it will destroy BP, but why wouldn't Russia just sit on the holding and leave it in limbo. I doubt Russia would confiscate BP's holding, as BP could probably sue for compensation from other Russian assets held in Western banks, but they could make life extremely hard for BP, and who'd want to buy the stake and risk sanctions anyway? Would the Chinese offer BP a fraction of the investments true worth? Apparently Chinese companies are currently avoiding doing business with Russia, for fear of ending up on a US sanctions list.

"I prefer facts to opinions about possibilities.
At the moment it is not a write off, but they are making accounting changes regarding it."

I was convinced Putin wouldn't invade Ukraine, but he did. The way things are going with sanctions and other developments, any investments in Russia will likely become worthless in the near future.

"Where did I say that? - I wish people stopped making things up."

You implied it with some of your arguments, suggesting that an increase in EPS wouldn't lead to an increase in Lloyds share price. If earnings doesn't change, then an increase in EPS should push the share price up, otherwise what's the point of buybacks?

"BP -At the moment it is a change in the accounting"

The way things are going, theres a good chance the Rosneft investment will be written down to zero, from a possible valuation of $25 Billion, maybe lost completely without the option of selling, including a drop in dividend income of £0.6 Billion.

"Only if earnings are at least maintained - end of."

Why are you saying Lloyds Revenue and Net Profit will drop? They could just as easily go up, or stay the same "- end of.."

"BP are spending billions on BP shares and have already stated a commitment for them to continue. A number of my invested companies are buying their own shares."

BP are currently defying gravity, it wouldn't surprise me if the price drops over the next couple of weeks. The Rosneft loss isn't anywhere reflected in todays drop, in my opinion.