Member Info for hghotshot

John, I believe there have been two factors at work here which have caused the share price fall of 20.8% from 56p in November 2021 to the current offer price of 44.37p. Most significantly, the NAV has been hit by the rising interest rates. The Official Bank Rate has risen from 0.1% in November 2021 to the current level of 5%. This fall in NAV is regrettable but a normal response; as interest rates go up, NAV will go down (from around 53p in November 2021 to the current level of 45.55p) being a decline of 13.3% on the November 2021 share price. Sadly, there has been another significant change which I am unable to explain. Historically, these shares have (nearly) always traded at a premium of around 5% and as much as 10%. They are now trading at a discount of 2.6% ( based on NAV of 45.55p and offer price of 44.37p). This change from premium to discount explains around 7.5% of the total decline in share price of 20.8% from around 56p in November 2021 to the current offer price of 44.37p. I cannot explain this reversal in sentiment towards the shares but fervently hope that it reverses. I have held them for many years.

This can be bought for 70.628p now; a discount of 4.9% (based on latest NAV of 74.25p on July 6). It is rare for this to trade at a significant discount. Over the last 12 months it has usually traded at a premium of around 2%. Unless, I am missing something?

This can be bought for 95.9p now; a discount of 5.2% (based on latest NAV of 101.13 on June 30). This looks like good value to me as it is rare for this to trade at a significant discount. Over the last 12 months it has usually traded at a premium of around 2%. Unless, I am missing something?

This can be bought for 44.95p now; a discount of 1.96%. This looks like good value to me as it is very rare for this to trade at a discount. It normally trades at a premium of between 5% to 10%. Unless, I am missing something?

Spawny100,

You can tell them that what they are telling you is rubbish. II and several other platforms pay with 15% WHT (if W-8BEN is in place). The location of the listing (London) is irrelevant. It is merely is the source (USA) of the dividends which is relevant.

See here extract from DEC website:

Pursuant to Section 7874 of The Internal Revenue Code, Diversified is treated as a U.S. corporation for all purposes under the Code. Therefore, dividends from the Company may be subject to US withholding taxes, depending on the country of residence of the shareholder, and whether the country has an income tax treaty with the United States. The statutory rate of withholding under the Code is 30 percent, which may be reduced by an applicable treaty.

For non-US Shareholders who are individuals that have not previously completed the appropriate US Withholding Tax Form, Form W-8BEN (or W-8ECI in some cases) relating to US withholding tax for non-US investors should be completed. For non-US Shareholders who are corporate entities, Form W-8BEN-E (or, if applicable, Form W-8IMY or Form W-8ECI) relating to US withholding tax for non-US investors should be completed. In some cases, Form W-8ECI may be applicable to individual Shareholders that have other U.S. taxable income and file a U.S. income tax return.

For Shareholders who complete and return the US withholding tax form relevant to them, the rate of US withholding tax will be adjusted to a rate of between 0% and 30% depending on the elections provided by the Shareholder in the Form W-8 and in accordance with the withholding rate under the applicable double income tax treaty (for example, 15% under the US-UK treaty).

Agi, MrG, Guitar, Nthof, very good posts. Just bought some more at 46.2864p. If the dividend is maintained (I see no evidence that it will be cut) and re-invested the dividends will pay for the shares in just over five years. I see a major disconnect between the reality of the financial performance/position and the share price. The share price appears to me to reflect some future, unknown catastrophic events. I am very happy to hold these shares and will be even happier to add more at even lower prices.

Trotsky, you are absolutely correct.

Barclays statement:

"This stock is out of the scope of the active W-8BEN that is held on file, as this form is for foreign stock held on the Nasdaq or NYSE markets."

is completely wrong.

It is where the dividends come from that is of consequence. The dividends are paid by US companies and are therefore subject to the treaty rate of WHT if a W-8BEN is in place. This will be the basis of my complaint to the ombudsman.

Blackrocktrader, here is a summary of the battle being raged on ADVFN.

I have my DEC shares held at Barclays Smart Investor. All dividends received (since September of 2022) have been subject to 30% withholding tax. I made a formal complaint without success.

I received a letter from Barclays Smart Investor (on May 30) which contains the following:

"As confirmed in our call, the tax on the dividend could not be processed automatically at 15%. Regrettably, this had to be processed at 30%, adhering to our processes. Our administrators have confirmed that on the Smart Investor platform this Corporate Action tax setting is 30%, and there is no requirements for UK instruments. This stock is out of the scope of the active W-8BEN that is held on file, as this form is for foreign stock held on the Nasdaq or NYSE markets."

It is clear that the existence of a valid W-8BEN at Barclays Smart Investor has no effect on the rate of withholding tax on dividends from Diversified Energy Company and that Barclays Smart Investor intends to continue to deduct withholding tax at 30% instead of the tax treaty rate of 15%. I am aware that other platforms (e.g. HL and II) can deal with this perfectly satisfactorily. It is barely credible that such a straightforward matter cannot be handled correctly by an organisation the size of Barclays.

I intend to pursue this issue with the ombudsman to recover the amounts deducted incorrectly.

Very encouraging interview if you ask me. Current SP reflects the near certainty of some future catastrophic event.

The situation reported below continues. I believe that many (if not all) of the sales shown this morning are actually buys.
Several recent sales are shown as 1.285. I am currently being quoted 1.285 to buy.

I believe some (if not all) of the sales shown this morning are actually buys. Most sales are shown as 1.284599. I am currently being quoted 1.284599 to buy.

Jim800, I agree with you, in particular your concerns surrounding difficulties in understanding the reported accounting numbers. If (for example) one looks at the numbers on LSE, one sees a mass of seemingly important negative numbers (including negative equity). Greater efforts need to be made to explain these. I believe this is fundamental to getting the SP moving in the right direction.

Edison issued a research note this morning. Very encouraging if you ask me. Current SP reflects the near certainty of some future catastrophic event.
https://www.edisongroup.com/research/covered-dividend-with-a-12-yield/32198/

I use both ii and Barclays for DEC. They both always pay my dividends in £. I have a W-8BEN in place with both and ii have always deducted the correct treaty amount of 15% WHT. Barclays incorrectly deducts 30% WHT despite the W-8BEN being in place and I am engaged in a battle to recover the amounts incorrectly deducted.

45Bob, I too got out on Friday (76.8p). I confess I did this more to take advantage of low prices elsewhere than in anticipation of the collapse in SMIF this morning. However, the exposure to banks, to which you allude, was a concern. I believe the hysteria surrounding the banks will prove to be a transitory phenomenon and fully intend to get back into SMIF very soon, at prices much lower than before.

What anticipated catastrophe has the market factored into this share price? Recent highlights include:
PER 2.4 for last full year ended September 2022
100% revenue growth over past three years
EPS up 1,200% over past three years
Cash of $143 million at September 2022
Dividends of 6.5% anticipated for 2022/2023
Does anyone know share that is better value at the moment?
Please let me know?

I think there has been a read across today from Pan African who reported interims which has caused a drop of around 5%. PAF reported lower production and higher costs. I personally am not alarmed by the PAF interims (outlook is unchanged) and view the current SLP price as anomalous.

Just for your information, I use Barclays Smart Investor for my holdings in DEC and am currently engaged in a battle to persuade them that the correct rate for withholding tax when a W-8BEN is in place is the tax treaty rate of 15%. I am being told that 30% is the correct rate and that I need to submit an R189 Form?? (to whom it is not clear) to recover the 15% in excess of the treaty rate of 15%. This does not make sense to me. I previously used Interactive Investor and always received the dividends from DEC net of 15% which is the correct tax treaty rate when a W-8BEN is in place.

From 52p in mid-November to 68p in mid-January? Someone, somewhere knows something. Any idea what is going on? Maybe a takeover is on the cards? Discount is still close to 40%.

rylidan,
Where do you get your short positions information? The LSE page here shows no open short positions and no previous history of such positions.