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Longish,
Thanks. VG points. Just a few thoughts: service revenues grew merely 0.1% in Q3. Down from 0.5% in Q2. It's the trend of falling revenues across the board that concerns market. Especially when VOD expect to be taking on new debt to invest in 5G. Benefits of 5G may take a while to be fully appreciated.
Also, competition increasing in some nations, which seems likely to reduce prices for customers. Whilst some key markets are facing economic downturns, not least in EU, which may also affect revenues.
Despite all that, do I think it's oversold? In view of VOD's synergy plans to save $10 billion over 2 years, yes. Hence my add at 133.44 yesterday. OTOH, it appears that a future divi-cut (after this year's final) is also being priced in. Agreeing with others, that's probably what we're seeing. If debt can be reduced without slashing yield or selling off infrastructure, this will fly by some way. But as it stands, that's far from guaranteed. It's the uncertainty that's affected sentiment. - Regards.
Bruce,
Agree with you & Dan. Without knocking anyone here, I've said same. This isn't low-volume AIM with poor liquidity. FTSE stocks are mostly traded via SETS, a highly regulated electronic system. The days of significant MM involvement affecting SPs of large cap stocks is over. Even many floor traders are disappearing as algorithms increasingly take over. If proof of widespread manipulation was present, large investment funds wouldn't participate in such a racket.
Many of us are where we are because we badly mistimed our entries & underestimated risks (for eg. the debt if revenues fell), whilst believing this would remain a sound defensive stock for longer. It's a bitter pill for some to swallow. But it's the only way to keep learning from errors. - GL. Catch up soon.
Aw100,
Here too. Missed better trades elsewhere. Let's hope 200 returns at some point, but that debt will need addressing. If it isn't, one daren't try to guess the bottom here. High yield is great, but only if SP holds up.
Final point: that Calao timed his exit as CEO perfectly as well as selling all his VOD shares at about 180. He knew the brown stuff was about to hit the fan & it's been all downhill since he left. - GL. Catch all later.
AW100,
IMO, what we're seeing is a bit more than that. It's about to make a new 10-year closing low. We're seeing a serious loss of confidence in VOD being able to reduce current & planned new debt without taking drastic measures. - GL.
H-hi,
Thanks. Comment much appreciated. Sound advice & I much agree. Started SBs 23/02/2011. Just over 8 years ago. If I had my time back I'd have opened a 2nd real share account instead. Whilst I've not lost a fortune, I've handed back every penny profit & a substantial 5 figure sum of my own money. In context, my real share account has stayed well in profit despite current paper losses. That speaks volumes. Realisticailly, any complete recovery may take a while, as with VOD.
But the advice to others is clear enough based on personal experience: stay away from SBs. If entering stock markets, stick to real shares. Chances are it'll save you taking crystallised financial losses & a lot of stress to boot. - Regards.
Dan,
Thanks. Quite agree, even though SB longs do get dividends as well & they're paid on actual ex-dates, not later as with shares. But I much prefer shares for reasons outlined. Eventually, I'll close my SB account altogether & stick to real shares only. But that time isn't now as my leveraged paper losses too great.
Indeed, with SP at 10-year lows, only those seniors buying now or recently will view this as an excellent buy for yield. L/T holders from years ago will ALL be well down without exception &, for some, time might not be on their side, though that depends on recovery time here. But many topped up at around 200+ & slightly lower.
But I see why folk are getting increasingly frustrated here. My woes here are cushioned only slightly by LLOY, BARC & IQE seeing rises recently. But I've been in worse spots with other stocks before & still come away without damage or an actual decent overall profit with yield. - Regards.
H-hi,
Nothing against senior citizens here, but I'm a long way off that. :o) Time is still on my side. Time will also prove whether those adding now are brave or plain foolhardy. No-one knows what will happen next. Most of us thought 143 was a bottom months ago, then 135. Brokers are as perplexed as the rest of us with targets from 125 to 300.
Same rules apply: to each their own according to risk appetite. This could hit the 120s & fall even further. We can;t rule it out. OTOH, a rally to 140s would see me book some gains again, aside from yield. - GL.
BoomerB.,
Mindful that my powers of anticipating what markets will do in future are average at best, in the event of a good deal that pleases markets &, not least, UK's financial sector, I'd certainly anticipate a strong rally. If BARC failed to hit over 180 & consolidate, that'd be disappointing. Possibly 190s & even 200 on an excess of bullish sentiment.
UK banks have made underlying progress on a few fronts & they're far better capitalised. A lot of legacy issues are sorted. PPI ends late August. All things being equal, we've a future of higher yields & perhaps share buybacks to increase value.
OTOH, nothing is 100% guaranteed within strict timeframes. UK's Govt is weak & reliant on DUP. If we see more defections, another early GE would delay all those targets for a later date. - GL.
Looks well oversold. Joined a few others by adding another long at 133.48 to existing well underwater longs to try & trade my way of out of the leveraged mess. My real shares at 198+ & 175+ are of less pressing concern. - GLA. Some luck at least will be vital.
Stew,
Indeed. If only we had a crystal ball. But back then almost everyone here (bar a few) thought 180 was next. Why? No reason special, bar that most BBs of high-yielding stocks are dominated by L/T holders who only see strong positives. Criticism is generally given short shrift. So people get sucked into the bull. Not just for this stock. It happens on most BBs.
With hindsight obviously it was a huge error not exiting at 170+ in early December. It's beyond disappointing. Extremely poor & at this rate one can;t assume it can't go lower still. A right effing mess! - GL.
Ivap,
Somewhat academic correction to my comment 11.34 today. Rushed posting as distracted by other screens, I dragged my LLOY spread-bet positions from ii's forum & said they were my 4 share tranches. My LLOY's share buys are in fact at significantly higher entry levels from way back in 2018. Hence more divis collected over time.
My share tranches buys at 62.29, 64.58, 65.16 & 66.78. My SBs are smaller & were added later as free funds to add more shares had dried up. Just thought I'd clarify that. ;o)
Targets on leveraged longs lower than for real shares. Latter may be reduced only in stages at circa 73+, in case that mid-term resistance levels holds & we see more retreats. - Cheers.
BoomerB.
I certainly don't disagree about doubting many so-called experts. A quick glance at broker targets for most stocks readily confirms that. However, beyond accepting current factors for why UK banks & most of FTSE continues to be negatively impacted (ie. they hate prolonged uncertainty), neither do I have sufficient knowledge of the ramifications of various Brexit outcomes longer-term. Not least how they may affect UK's financial sector later. Too complex. Granted that not everyone is negative, many are. As long as that persists, market sentiment is also affected.
Keep in mind that FTSE 100 saw levels of nearly 7000 as far back as 1999. We've only recently gone back over 7100 again after falling back from levels of 7903+ last year. Much of that previous gain was down to weakness of pound as most FTSE 100 stocks register their profits in dollars.
Anyway, BARC remains a hold for me to be reviewed at over 200. - GL.
4ndy,
Unless my info is wrong re ex date, it's on 4th April. That means you need to have held LLOY shares until close of market on the 3rd April. That's vital. Theoretically you could buy during market hours on the 3rd April & sell on the 4th & still get the dividend. - GL.
IvaP,
I concur with your views on LLOY, notwithstanding some bullish bias as it's also my main hold by far. 4 tranches of real shares (@ 62.29, 63.22, 63.68 & 63.90), plus 5 longs. With yield already taken, anything over 70p would see a decent profit overall, mindful of 73+ mid-term resistance. But if we get past that, 89p L/T resistance tested in 2015 would likely be re-tested again.
Considering that over recent years some £19.4 billion has been set aside by LLOY for PPI, it just goes to show the scale of the profits this bank makes every year. Post-PPI, no question this will be a lot higher.
Whilst it's dependant on temporary fluctuations of UK economy, it hasn't the exposure to far greater variable risks that all global investment banks carry all of the time.
PS: I may add many more LLOY shares soon if I decide to exit VOD. That's an active consideration for later. - GL.
BB,
I shall leave to others to discuss your claims that the impact of Brexit as being "that big of a deal is laughable". Plainly UK markets, not least banks & much of UK business aren't laughing. They think otherwise. IMO, that's telling. ;o)
FWIW, I voted Brexit, be it with huge doubts. Mostly against the lack of apparent accountability from the EC. If there's a 2nd Vote, I shall not do so again.
LLOY is my biggest hold by far. I'm content to hold that longer-term as though it's dependant on UK economy, it has zero exposure to the variable global risks that all investment banks carry all of the time. BARC should be fine longer-term. At least for well over 200. But almost anything can kick off globally & at anytime to delay recovery for IBs for even longer. - GL.
I go back to my comments of yesterday: bar that no-one knows how VOD's synergy plans & other deals will evolve, this is one to keep a close eye on if concerned about amassing more paper losses. Especially look at daily volumes. If they're larger than average, then chances are more funds are dumping. If so, that's a bad sign. This stock is clearly far from out of the woods. Market doubts it can see a turnabout anytime soon.
I've no intention of cutting anything now. However, it's also important not to get sucked into confirmation bias & only see positives. If this stock deteriorates with next results, I'll probably take a huge hit on this.
The collective yield already taken will be but a small consolation. But sometimes one holds one's hands up & calls time on what has been a huge error so far. - GL.
BB,
Thanks. I'm not saying the impact will be much greater with a no deal. What I said is I think a hard Brexit is being mostly priced in. Hence we are where we are. However, if we saw a good Brexit deal that markets viewed as relatively benign, there's no question in my mind that we'd see a decent rally from current levels.
Basic realism about the situation doesn't mean losing one's head & selling at L/T lows. I intend to hold. - GL.
BB,
It's more about markets generally hate uncertainty. Especially when it's protracted. Brexit poses huge uncertainty for stock markets & wider UK economy. That's how it works & that's what we have now. Most UK banks being impacted accordingly & most other sectors to a lesser degree. - GL.
BB,
It's no mere coincidence that most UK banks & much of the FTSE are performing poorly as markets seem to be pricing in a hard Brexit the closer we edge to 29th March deadline. That's reality, regardless of what anyone thinks of Brexit & I have no wish to get into that on a BARC BB.
Markets always look ahead. To deny that is about as as valid as the Millenium bug. ;o) - GL.
Agree. One encouraging factor is that Read was promoted to CEO from inside, so knows the business as well as anyone & better than most. So his confidence about keeping the divi carries weight, assuming his synergy targets (to save $10 billion over 2 years) & other moves go to plan. As we know, that's never a given.
However, even if he was forced to trim rather than slash dividends, to reduce debt faster, that too can go down well with markets. I've known some SPs to actually rise soon after a divi-cut as market can see debt reduction as a more positive step than paying a very high yield.
But anyone buying in at these levels should do well holding over time. Alas, my cheapest buy is 175+. Though I've traded it successfully before, this time I got badly caught out by the idea that VOD would remain a "defensive stock" as over previous years.
I've not added more with dividends as I'm building a bigger cash position due to certain macro uncertainties affecting UK's economy & that those may well continue for much longer. - GL. Catch up later.