DriftKing ... from what you write it looks as though your thoughts are that if you rebuy within the 30 day period you are free of CGT. If so, then I'm afraid that's not how it works ... here's the details from guidance sheet HS284 (2018) ... "If a disposal of shares is identified with shares acquired within the following 30 days, the gain or loss on disposal is the difference between the net disposal proceeds and the acquisition cost."
So you will be eligible for CGT on the difference between your sale and re-buy price. And although that is likely to be a smaller amount (given the 30 days) than if you had sold outright the real disadvantage is that the rebought shares now acquire the purchase price of the shares that you sold at the beginning of the sequence.
Overall it's a nightmare ... suffice it to say that the optimum is when you make £11,700 of CGT's in the year and no more.
If you are a husband and wife team then you can exploit the fact that you both have separate CGT allowances _and_ you can gift shares between yourselves for no tax. So husband (H) sells the shares ... gives wife (W) the money and W rebuys the shares. Then 30+ days later W gifts the shares to H. You've effectively B&B'd the shares and managed to crystallize your gain thus using the allowance to the full.
So what does the Head of HR know that we don't? Or put another way, I wonder what his thought processes where behind selling £638,000 worth of shares a couple of days ago?
Maybe his thoughts were a bit like mine as I sold out at just over 1600 ...
Well time will tell ... Good luck all ... I've made my targeted gains for the time being so I've no complaints and I wish you well.
If/When it gets back to about the 1350 sort of level (6% yield) then I'll be back in again.
If you don't watch it you end up selling when the price is down and buying when the price is up ... which of course is exactly the opposite of what you want to do.
So unless you are a true contrarian ... in which case, the question is when is the bottom the bottom and when is the top the top ... can I suggest an alternative way of thinking about it?
For these income based, widows and orphan, shares ... buy when the yield is above say 6.25% and sell when it drops to or below 5%? With GSK and its effectively constant 80p that gives you a range of 1280-1600. If you traded that range you'd have a 25% growth (5+ years of income) and a 6.25% return while you were waiting.
Of course this isn't a bank and you run the risk of losing the lot ... but then when did your bank give you a 6.25% return with a potential windfall of 25%?
I concur with RichRed in terms of how it would have worked ... what was sold on your behalf was the right to buy at £1.55 per share. Whoever picked up the rights would then have to add £5.18 to make the share fully paid up before it could be sold on.
So actually, looking at the figures you didn't do at all badly out of it ... which is a surprise to an old cynic like myself.
I reckon that on 9th, the day before the new shares were admitted, the closing price for the rights was 150 and you got 155 so well done you! As to whoever picked up the rights ... they paid 155+518=673 for each share ... and on the 10th the market closed with PHNX at 677. So not a lot in it really.
Thanks for the numbers it's always interesting to see how the other options played out!
55p for a final dividend would be very nice, very nice indeed but I don't think it's going to be that high.
The last interim (before the rights issue) was reduced by 12.5% to give 28p. If we reduce last years final by the same amount we get to 56p ... but we've had a rights issue inbetween ... and if we split the 56p over the additional shares as well we get to 42p.
As I tend to be conservative when predicting dividends and dividend growth in my books I've got 42p final written down, which with the 28p interim makes 70p for the year. On an historical basis that gives me 6.18% (for the price that I paid plus the RI). For new investors that would give 7.58% based on yesterday's price.
I rather suspect that one of two things is going to happen ... either the BoD will take the opportunity to 'normalise' the yield and increase the cover by cutting the dividend -- which is not going to do much for the share price, and even less for my historical yield (and we're income investors) ... or, the dividend will be maintained at or just above the 42p level and the share price will rise to bring it back into the 6.5% sort of yield range. (That's my bet by the way)
BewareTheShadows ... sounds like a plan.
I too have a sell order in for effectively 1600 ... like you the capital gain at that point (26-27%) will equal several years income and make it worth while selling -- although normally I'm a very long term holder for income. Trouble with holding GSK for the long term within my own p/f is that there's no real dividend growth at the moment and a relatively large swing in price (and yield).
Fingers crossed on a blip it might reach the 1600 level over the next day or two!
Londoner ... thanks for the thoughts/analysis ... very nice to see such a reasoned exposition of the recent trading statement!
We're income investors and whilst we keep an eye on capital values, what drives us forward is the long term income stream (dividends) that we get from our investments. So rather than being share price focused what really ticks the boxes for us is a maintained and preferably modestly progressive dividend payment. We were not disappointed with the recent interim earlier in the month and are looking forward to the November results (and January dividend payment).
Our average price is 108 ,,, giving a very creditable historical yield of 6.9% ... which we're more than happy with. We would top-up more, but our holding here is 'up-to-weight' for the rest of the portfolio, so until we've exploited opportunities elsewhere we'll be sitting on our hands!
Long term ... I don't see the company going toes up ... I suspect the sector as a whole will come back into favour, if only as a source of income for old folk like us! Back in the day it used to be that Drink and Tobacco were the two stalwarts of income ... Tobacco I don't feel happy with from an ethical/moral viewpoint (that's my choice, others may choose differently of course) ... Drink I'm very happy with!
In short, whilst the equivalent of two years income down at the moment, I don't see any reason not to hold here, and as I say, when the balance of the portfolio changes I'll probably add to the holding.
When you get your card ... do me a favour and have a look at the back of it to see if it has an expiry date of October 2018.
Mine does and I'd be interested to see if they are issuing ones with an expiry date after that considering how close we are now to the renewal point.
Also does anyone know whether renewal will be automatic or not? My shares are held through a broker's nominee account so unless they made a note of my details when they issued the card I can't see how they can issue me with a new one!
BTW ... I think the qualifying level for the card is 500 shares so in theory if you sell, leave that number in your account and for £500 or so you'll get the discount.
We're income investors ... but unusually we sold a bunch of these at 2750'ish as the P/F had become rather top heavy in Shell. Pleased that we did as we max'd out two lots of CGT allowance and can now move the cash into the ISA's when the price is right to rebuy.
Overall though such shenanigans are not our style, much preferring to buy and forget ... and there's always the old proverb "never sell Shell"!
I see where you are coming from ... but in life you some times need to loose weight in order to get fit to win the race.
As someone who carries too much weight, that holds me back ... I can testify that some times you have to thin down before you can improve!
I agree ... VOD is pretty much a range trading share with a good consistent dividend payment to keep you interested while your're waiting.
I'm essentially an income driven investor ... but when I first set our portfolio up I made some mistakes, as we all do ... I got into VOD but at the wrong time, back in 2015 at about the 2.28 level ... bad timing really but the yield at that stage seemed attractive and I thought they might have a bit to run on the SP -- but it was the yield that I was buying for really.
Sold half in 2016 for 2.25 as I could use the money better some where else, and the second half in 2017 for 2.33 for a small gain.
Overall, including the dividends I made 4.91% pa on them ... so not a disaster for a beginner.
This time round I've bought in at 1.93, 1.92, 1.84, 1.84 for a weighted average price of 1.88.
At that level I'll be happy to collect the dividend for a while ... but when we get back to the 225-230 level I'll be looking to sell again as my capital gains at that stage will be equal to 3-years income and that's my criteria for considering an exit -- unless there's a firm reason to expect further gains or growth in income.
The new shares rank ... pari passu ... equal-step ... with the existing ones. They are indistinguishable from all the others that are/were in existence prior to the RI.
So, any restriction on sale etc could not apply to the shares themselves per se ... any restriction would have to be done on a contractual/agreement basis with the actual holder. As such it's virtually impossible to create/adminster let alone police ... for example if I sell 1000 shares, is it part of my original holding or part of the new issued shares?
From here on in we are dependent on what the market thinks for the share price itself.
Inevitably once the RI has completed (ie now) there are a number of investors who have extended themselves to take up the rights and are now looking to reduce their holdings. Hence the usual/general decline in the days/weeks after ...
I'm not expecting much of an increase for about 6 months ... that would be about right I feel for a bit of rebalancing of holdings etc.
I think we're working to the same script ... topped up our ISA holding yesterday ... We use the ISA's for an income driven investment policy for long-term dividend income rather than capital gain.
VOD is now well into our buy range and having some cash from a top-skimming of RDSB in the recent rise we put some of it here.
Our main aim is to buy and hold for the very long period at consistent dividend rates of 6%+ ... usually 6.5% these days. But if the yield drops below 5% due to share price increase then we'll consider selling for the gain (RDSB did that recently).
What do I think about 160? ... not so likely I think ... maybe the high 170's at a trough ... 240? ... also not likely -- but if we did get up to 220'ish I'd be using the calculator and thinking about a sale. In the meanwhile I'll hold and bank the dividend.
You're right .... they have actually been changed/consolidated, it's just your broker's accounts that are taking time to catch up with reality.
iWeb had theirs posted yesterday ... best brokers that I've ever come across, £5 a trade, zero cost limit orders (in ISA's), and a very professional telephone service and back office. (Ps I don't own shares in them!)
You may not think of yourself as a mathematician but your numbers are spot on.
Now why didn't I think of looking what they did last time! You're right they didn't drop down as far as the RI would have suggested that they did ... 17p was the adjusted figure and they actually paid 23.9 rising to the 25.1 on recent payments.
This time around the adjusted figure is again 17.1p ... before an announced rise to 29.5p. I wonder if they'll pitch in for the interim at around the 20-25p mark. If so, nice little income earner on what we're holding at the moment (thanks to 2 RIs!).
Actually, this October and next May there will be more shares in issue ... so if the dividend amount is maintained the same we will only get 17p ...
I can see what happens after the coming year end in Dec 2018 but not what will happen this October and next May during the transition period.
Anybody got any ideas or firm information?
Have I got my maths right?
Just been looking at the level of dividends that we can expect _after_ the rights issue.
At the mo there's 393m shares in issue, after the RI there will be 578m. Current dividend amount is £197m which gives 50.2p per share over the year ... which looks correct. After the RI the prospectus says £338m after year ending 2018 ... that should give us 59p per share per year.
Year end is 31 Dec ... so I'm expecting 59p per share _after_ the payment in March 2019.
So this October and next May we get 25.1p per share (+growth hopefully) and then thereafter 29.5p per share for October 2019 onwards (+growth of course).
If I've got that right I can live with that ... I'm essentially an income investor so these things are important to us.
Oh, thanks for thinking of me ... I'm still here and watching carefully the goings on ... still just as invested as before, not sold one share or added one either for a long time now.
I would add more, but I'm excessively over weight here (whilst being only mildly overweight in real life!), and can't really afford to increase my risk profile at the moment.
My viewpoint hasn't changed, if anything, I feel that we've moved closer to the point where this has to break out of the groove that it's been stuck in for a while.
The ultimate question has to be, "What is the management's plan for extracting value/income from the company?".
If you had asked me 12-18 mths ago before the wider management all chipped in to support the company I would have said that the end game was probably a bid/sale. But now that the share holdings are wider amongst the company there has to be either a) a substantial share price increase to allow for them to sell into the market place, or b) a substantial dividend stream. Both of these suggest a significant rerating of the share price is on the cards in the not too distant future.
One thing is for sure, the games the market makers are playing with the bid/offer prices to create 'churn' aren't helping the sentiment any ...