Member Info for johncut

I do agree probably not as much money as expected but i think its probably the fact all the leases, staff, rent and rates will be off the books. Tax implications from 1st April i imagine will really hit trading profits and no way of really increasing sales.

The private equity people are probably rubbing their hands together. They could fund the whole £76m as debt, interest at 12% and pay 9-10M a year. If trading profits are 25-30M there's some nice fees for them.

I imagine £10 a share is near the bottom for the SP. Recession fears though are probably having an affect on travel so might not be a fast process. Airline stocks look super cheap though at PE's of 5.

Think its a share that will always be limited by fact its in managed decline. 8 or 9 times earnings is probably max. This year EPS of 327 * 9 would give £29.43 + 6% divi. I mean all things equal by 2030 you could see £40+ if eps grows 8-9%

Must of been the news release. I topped up for my divi portfolio. Basically dividend will go up 4.5%, EPS up by around 8-9% and the rest of cashflow into buy backs. Up to 2030 this looks about as reliable as it get IMO.

I've got Tesco with a dividend cover of 2, Interest cover of x3.8 (500m debt cost on circa £10bn), £750m in buy backs from sale of Tesco bank to Barclays, freehold estate circa 55% of selling space worth circa £16bn, ROE on equity between 15-17% depending on which figure you use. EPS to grow between 10-15% this year and dividend to rise by similar to yield north of 4%.

To me this seems a solid buy and i'd buy for my income portfolio. SUPR reit also looks good if just want supermarket property yield.

sorry divi rises by 5% a year. Thats it. If 19.45p this year will be 20.4p next and so on.

https://ii.co.uk/analysis-commentary/stockwatch-insurer-really-returning-growth-ii521049

https://citywire.co.uk/investment-trust-insider/news/david-stevenson-back-boring-housebuilders-to-beat-market/a1540359?ref=investment-trust-insider-latest-news-list

https://citywire.co.uk/investment-trust-insider/news/david-stevenson-back-boring-housebuilders-to-beat-market/a1540359?ref=investment-trust-insider-latest-news-list

I don’t dispute this looks a great value share hence I’m in big with my sipp, Isa and jisa.

Hi Matt,

I was probably to hasty quoting figures but had had a look at H1 2021 1079 vs H1 2019 1005 and op profit if about 7%. up. Not flat but not massive either. I guess my point stands that the revaluation of assets due to interest rates is the main driver in the EPS figure. You could say this is long overdue but it does misguide investors and this will be the main reason for the eps and roe bump. Their LG capital division does seem to be a higher growth area. I guess this must be funds under management, esg funds, etf’s etc which have attracted a lot of money and will probably continue to do so.

Investors here need to realise this is a low growth but very solid business so gains are not quick and SP move’s more glacier like not like it’s going to be £3 before the end of the day and £4 by the end of the month!

Has anyone actually read the report? Operating Profits are essentially flat and the increase has come from no further covid costs and the prospect of higher interest rates boosting their investment book (I think). Check the variance line further down.

I think I would have expected better. Hopefully some others can provide further analysis.

I sold out at about 1.15 maybe 4-5 months ago after buying at 0.95 or so in 2020. There was a share issue so existing shareholders were diluted. This smacks of under the radar capital raising so any dividends you’ve received would be cancelled out by this dilution whether you subscribed to the issue or not via the SP drop.

In my mind this will hamper further dividend growth and share price. I’d prefer less debt and less dividend so more capital could be put to work buying assets rather than paying through the nose for capital via an external hedge fund.

I might be wrong but buying just for the dividend has caught me out before so for me it was hit the exit.

If they had access to 1bn in funding from oaktree why raise equity. I think looking to take advantage of a frothy market with fundraising. Looking at primary bid your holdings could be diluted by up 20%. Am glad I sold out last week to be honest.

I would disagree about book value. I think the superior returns of Redrow and Bellway over PSN in the last 8 years would indicate which have been the better investments. As PSN is on such a high valuation of course there won’t be as much room for sp growth compare to other builders which is what probably has happened here. I do agree with both sentiments though that in the coming few years the sector is on a one way ticket upwards but as always some will probably perform better than others. Inflation and interest rates are likely to assert some clouds within the next 12-24 months although will be tempered if strong growth in employment and pay.

I do feel that if you place a higher score on p/bv then you will limit your downturn compare to a higher rated shares. This is what will happen to tech stocks when the fed stops printing easy money and the tapering begins / rates increase.

Ok thanks - what kind of special payout are you expecting - Same 10.7p again? I can see makes would make a 10% yield at current sp. Obviously no issues with sp basically flatlining since circa 2014?

I love a divi stock as much as anyone else but it seems to be divi or nothing for TW. I do have some DGOC, LGEN & Bats as my high yielding with some IT's alongside like henderson far east yielding 7% currently.

Hi - Just curious but why do investors here prefer this share to say Bellway or Redrow? Bellway for instance kept paying a dividend although reduced even through 2020. Also why hold house builders for dividends? Surely these are lumpy as and when the bad times come in as they do every so often. Eg: LGEN, BATS, energy stocks pays a rising dividend even during the bad times if thats what investors need. I do admit to holding a couple house builders in a dividend portfolio as well as the growth one but mainly for capital growth which has been strong this year. Just interested in views. Thanks

Share price has had a good run - Would expect a pull back shortly along with the whole market. I’ve got it going up 25% in the last 6 weeks or so.

You should see if Mr Clyde fancies it. I’d do it but think would get absolutely flamed as a buy to let investor by the DT audience.

Enjoyed the article write up. Always good to see previous trades

Hi Vlad - yes same from the DT. Can’t remember mentioning M&G out loud but I have looked at it but I just dismissed as a value trap. However as you said you’d probably get a year or 2 SP growth before it starts sliding back.

Strictly - I can imagine the 20% plus return for your friend. I think Bellway has returned that in around the last 6 weeks. I picked up at £28 and is now 20% up on that. Lucky hit that one. Redrow has returned around 16% over that period so maybe will catch up?

Hi Vlad, M&G is always top of the yield list...I just thought was a value trap however I did start reading up and it’s actually spun out of Prudential which I thought was a well run company so did think may be worth looking into. Will this not be a very cyclical company depending on the wind of the economy ie at the moment people are pouring money into ISA’s, pensions etc so funds under management will continue to grow for the moment. Maybe in a year or 2 the sugar rush of the Biden bounce, furlough money etc will wear off and interest rates will climb and share prices will retrench funds under management will reduce...?