Member Info for LordAdam

Here's some detailed analysis ... assuming that you bought in today (16/9/15) and finally got your 670 at the end of March next year (31/3/16) ... the price that you pay now dictates the effective annual rate of return that you obtain. Here's some figures (courtesy of the XIRR function in Excel): 650.0 Yields 5.8% 652.5 Yields 5.0% 655.0 Yields 4.3% 657.5 Yields 3.6% 660.0 Yields 2.8% 662.5 Yields 2.1% 665.0 Yields 1.4% So if I have a stash of money and I can get 2.8% on it in the bank ... I'm better off buying AML provided I can get it for 660 or less. The present price of 655 represents a return of 4.3% ... Remember this is from a buyer's point of view, we are sellers, so its the other way round for us ... we should only sell if we can get better than 4.3% elsewhere. My gut feeling was to stay with it and take the money in the spring ... but now I'm not so sure. I hold AML in an ISA which is aimed at high dividend yields and I can easily get 5-6% reliably ... from my own analysis I should crystallize the gain and move it on to something that yields a decent wack (technical term that). Mike

Back in the 80-90's when I was actively trading in the market rather than doing the HYP thing that I am this time around I had about 3-5 take overs. In reality it really was quite good fun ... those where the paper based days when we had share certificates, telephone dealings with a broker who spoke directly to jobbers and so on ... oh, and yes, contract notes and the 2-week settlement account! Anyway, back to the point after the detour down memory lane, from a selfish financial profit making point of view what you want is a fiercely contested take over. The bidder springs their offer, the board recommend rejection, the bidder starts buying/accumulating shares ... you hold out, you can't lose if the offer goes unconditional at the end ... a rival emerges and bids more ... and so it goes on. The winner takes it in the end, the threshold is crossed and you pick up the highest offer. The Amlin offer is not contested and the board are in full agreement with it. They already have/speak for a very substantial percentage of the equity. It's going to go ahead. I think the only thing that could get in the way is a regulatory or legal challenge and nobody in the business thinks that's even a vague possibility. A good indication of the near certainty of the situation is all the Form 8.3's that you see in the RNS feed. Basically every Tom, Dick and Harry in the capital funds market is buying a slice of Amlin at the moment. The reason being that a buy today at 655 and a payout in Jan/Feb/Mar of 670 amounts to about 5-7% payback and they can't get that anywhere else in such a risk free manner. My first thought was that selling half now and taking the money on the other half was a good/sensible thing. Now my thoughts are that unless you need the money right now or can get better than 6-7% on it the best thing is to wait for the cash next spring. But you have to go with your own comfort zone ... me, having done the numbers ... unless they are going to give me 660+ in the next couple of weeks then I'll hold out for the actual payout. Mike

I think in general not so many folk make themselves aware of the finer details regarding the in-and-outs of share dealing etc. The subtleties regarding AIM and the implications for IHT and SDRT for example spring to mind. Whilst I don't pursue these thing religiously when I come across something that I don't understand or didn't expect then I make it my business to find out the details -- if only for the 'next' time. So a case in point, a quick google on Divi-Max doesn't yield anything promising and prompts the question ... do you have a link? Your talk of a take over is interesting ... I've only put a small 'toe' in the water with a view to possibly trading in/out between now and the end of October. Long term I'd like to be in here for the yield but I'm not too sure as to how it will work out through this set of interims. Once I've seen the cycle through once I'll have a better feel for how things run. Mike

Here's an answer to my own question ... there is *no* SDRT levied on the sale of LRE shares. This is because it is a foreign registered company and it doesn't have a UK registrar (the registrar is the Jersey office of CAPITA). So it falls outside of SDRT. It may well be the same for the PTM levy as well -- although I haven't checked the details on that one. What this does mean, is that with a low-cost dealing service and the narrow spread it's possible to get in and out of this share for very little cost, making short term trading very attractive. Basically I can get in and out for a total of £10 regardless of size of deal and some of you folk can do it for less I'm sure. That means a few pence on the day will generate a profit. I'm not normally a trading type, but it's an interesting idea. Mike

Just bought a pile of LRE ... and was very surprised on closing the deal that I wasn't charged stamp duty (SDRT more properly) ... neither was I charged the £1 PTM levy on a deal over £10,000. I know there's no SDRT on AIM shares but LRE is FTSE-250 ... is there something I don't know or have forgotten? Do other folk pay SDRT/PTM on deals with this share? Mike

Well a limit order did the deed for me while I was out earning some pin money. I was fishing for 205, but the broker got 207.87 for me ... so well done them ... turns out that it was just about the best sell deal of the day (assuming that they don't go back up again before the bell -- which they may well do). So I'm now out of the ISA with Trakm8 ... now to get back in again to add the holding to my existing non-ISA holding. The way this market is going though I don't think 185 is a realistic buy level ... I'd probably settle for getting back in a bit below 200. Just to remind folk the purpose of the exercise was to make the best use of my CGT allowance and to release funds within the ISA for income generating stock. Having crystallized a 37% gain within the ISA I now have a nice chunk in there to reinvest and have moved money from a standard interest bearing account ready for the non-ISA reinvestment. Mike

Interesting problem this ... for historical reasons far too long winded to go into here ... I hold Trakm8 shares in two places. The first is in a non-ISA account, the second is within an ISA. Now, the way that I run the ISA is as a High-Yield portfolio with an average yield of 5-6% with reinvestment to compound the income into growth. The ISA will of course tolerate a decent capital growth and I'm looking at an average of 27% on the Trakm8 shares in there. So I couldn't have really done any better than that with dividends etc. But I'm not making the best use of my non-ISA capital gains tax allowance which is £11,100 for this tax year and I'm already max'd out on my ISA contributions. So my strategic plan is to sell the ISA holding of Trakm8, reinvest the money from that in HYP stock within the ISA and then to shift any future capital gain into my tax-free capital gains, non-ISA environment, by re-buying Trakm8 outside of the ISA. Does this make sense ... or should I just keep rolling the thing up inside the ISA on the basis that I can't get any more money into the thing before next April? I need to do some sums to flesh this maneuver out ... £13K of TRAK in the ISA ... current levels about 200 ... my expectation is about 220-230 before the end of the year ... 250 by next April's trading statement. That makes the 13K into 16.25K by next April. I can absorb that amount of capital gain outside the ISA ... so basically the comparison is between putting 13K into my HYP now, or leaving the present 13K rotting in a high interest account and having the extra 3.25K in the ISA in April (plus I still have to sell TRAK then to get the advantage). OK I've talked myself into it ... sell in the ISA, buy back outside ... no SDRT as its AIM ... total cost is the spread (ouch) and two lots of £5 for charges. But if I'm smart I can do something on the turn to improve things ... I have to do this over the next 4-6 weeks ... here's the 64,000$ question ... what should I sell at and what should I buy at bearing in mind that I could buy before selling as the two chunks of money are separate from each other. What about sell at 205 and buy at 185 ... are we likely to see those levels in the next 4-6 weeks? Mike

I'll be the first to confess that I've not seen this one before ... Form 8.5 on the RNS feed. I've seen Form 8.3 lots of times -- declaration of holdings in a company, but not this 8.5. Does anyone have the inside track on this? Looks to me as though its a declaration of someone taking a long/short position in the companies shares. If that's the case there's a lot of activity here suddenly. My reading of it is that various funds and brokers are using options to 'lock-in' gains that they've made in the situation that the whole deal collapses and they are left with just the basic AML shares again. What do other folk think? Mike

With these smaller cap stocks in the secondary markets they are not watched as closely as the bigger companies. So when results/comments happen the trading often follows a day or two after. I think we are seeing this here ... the AGM was yesterday, the brokers regraded/reiterated yesterday/today and the market is gradually waking up to the situation. But it's still a very thin market. What will be very interesting is if we close at a new high today and the step change is large enough it will trigger the automated stock screeners/watch programs and a lot of brokers/analysts will take a look at it overnight -- then we're very likely to have some significant trading tomorrow. Failing that, the weekend press may well be short of news and draw attention to it again. All in all ... good news all round ... my target for the end of the year is in sight and we still have 3 months to go. Mike

Update ... OK ... the special dividend has been announced in previous years with the Q3 results that come out at about that time of the year (Nov) ... so it's down to what the financial state of the company is at that point in time. This is where you folk who study the balance sheets etc come to the fore ... what's the numbers been saying so far this year compared to previous ones? Mike

Sorry to say I don't have an inside track on this one ... but looking at the companies history dividend for the last four years they've declared a special dividend on 4/11/11, 8/11/12, 6/11/13 and 5/11/14 ... so if they are going to repeat the exercise its likely to be early in November for payment in December. In the past the amounts have been 44p, 56p, 28p, 76p ... so not trivial, far from it. I wondered if anyone had any idea what the companies intentions were for this year ... or whether they thought the balance sheet supported a significant 'return of capital' this time around or not. Mike

Looks like I'm going to have to find a home for the money that will be coming from the recent Amlin buy out and I'm keen to get a head of the wave ... Looking at LRE and their dividend history and trying to get up to speed on how this company works and thinks about things ... do folk have an opinion on what is likely to happen early in November as regards a special dividend to be paid in December? Any feelings for what it may or may not amount to? Mike

A very promising statement .... orders so far up 19% on a like for like basis ... number of devices reporting to servers up about 25% (and they generate continuing cash flow from service contracts and fees) ... DCS camera systems acquisition is performing to expectations (ie no skeletons in the cupboard there!). Looks like a very promising year ahead -- I'm fully up to weight otherwise I'd be thinking of adding further. Looks like I'll have to settle for holding on the prospects of continued growth. Mike

Update ... I've found a list of major shareholders ... the directors hold relatively little between them (not unusual in the UK) ... there are six large investors who own 36% between them, the largest being Invesco with nearly 13%. Realistically it would need them all to act in concert together to prevent the offer from succeeding and MSI who are making the offer already have Inveso's blessing together with one of the others. Nope, baring a regulatory type intervention this one is going to go ahead ... its just down to the time value of the money now. Mike

Update ... the price at the moment (653p) suggests a discount rate of 7.7% if it takes 4 months for us to get our payment of 670. At that rate its probably worth holding on and not selling ... still I've put my limit in for 659 as that's a good point for me to switch to something else. As for the idea that this one is 'going to fly' ... can't see it myself despite what the CEO was saying just a short while ago. The company itself issued the RNS with no hint whatever of any contention regarding the sale. I can't find a list of major share holders, but without a really big player holding out for a higher offer it's going to go through I think. Mike

OK realism time ... the first euphoria of the offer is over and the dust is starting to settle ... should we sell now or hold out for the cash later? The offer is for 670 in cash, no share options, no future dividends or growth (other than the recent exDiv which is history now). So it should be easy to value. Assuming that it takes 3-4 months to wrap up the paper work and actually make the payment and that the whole thing doesn't get derailed by regulation etc. We have a straight cash flow of 670 in 4 months ... what's it worth now? I've used a discount rate of 5% to allow for a little uncertainty and to match the yield that I expect in my HYP (of which Amlin was a part) ... that gives a value today of 659 Theory goes that I should put a limit order in for a sell at 659 or better and be done with it -- what do other folk think? Mike

Well I wonder if today is the day that we close above 70p? We shall see ... Mike

That's what you get for having kids in the far east ... its not the AGM tomorrow ... the AGM is on Wednesday (8th) !!! Oh silly me, I need to get my head in the right time zone! ... and I would have been wondering why the RNS wasn't there first thing and getting in all-of- a-lather! We'll have to see what the last days maneuvering brings then. Mike

AGM tomorrow ... and a very quiet day's trading today ... 3 smallish deals at the time of writing. There may be a little flurry of activity as the market closes but it looks to me as though everyone is either in or out as they see fit and are waiting to see what the Chairman's remarks have to reveal. I think anyone who was intent on profit taking has been shaken out of the tree over the last few weeks so my thoughts are that with a positive outlook in the statement we're likely to see a sensible, but small rally in the SP. Good luck ... we'll see what the RNS has to bring first thing tomorrow ... Mike

Nothing has changed here for a UK company that has its manufacturing, sales and development based largely in the UK. The directors agreed/concerted action to transfer 5% of the company to an institutional investor (probably to facilitate future expansion) was some time ago and is old news now. This is not a rout, it's still a very thin market, there's no real weight behind what's happening and my own belief is that its the market makers who can't resist getting the red pen out this morning. I'm fully invested in my ISAs but couldn't resist using funds outside of the ISA to top-up this morning :) Mike