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Speaking personally I would not vote for a take over at less than £2 per share which is probably about +£20 billion for the whole company.
I am currently up on my BT shares by about 17% and I see the current price as undervalued. When I add back in the prospect of dividends then I would want at least a few years worth of Dividends built on top of the SP to make me think about any take over offer.
£15 billion might be passed in a few weeks time by a steady growth in the SP. You can't make a hostile bid at the level that is pretty much the same as the current SP.
I think the next big move in either direction will be in the next week or 2 when Brexit is finalised. (one way or the other).
Saga is probably more insulated than some but still expect that what ever the announcement this will swing with the market.
Once Brexit settles that hopefully will be one of the last external shocks to the SP and there will be more clarity on which way this will move.
Hi nige,
I'm more hopeful on the brexit front too, but the express does have an agenda so I'd be cautious about it being the only source.
But bbc newsnight was also hinting at a positive outcome too about a day ago, so here's hoping
Hard up is a retrace to £1 likely?
Sure it is, if the market valued the company at £1 a few weeks ago then negative sentiment can shift this again.
The question is whether you feel the odds of the sp being less than £1.25 in 2-3 years is greater or less than it being £2 (plus dividends) in 2-3 years.
I'd be shocked if the trend is below £1 in that time frame, but in between with brexit etc it's entirely possible that it will drop and if it does I have cash waiting to buy.
Although I may invest in Gsk before then if it hits the low £13 so depends what you feel is fair value.
I think with amazon moving into the pharmacy business the market expectation is probably that they will drive down prices, therefore less revenue for producers long term.
The difference between the UK and USA markets is the tech sector.
In the UK our tech sector is mainly UK focused so catering to a very small market that since brexit has deminishing purchasing power as the pound falls.
In the USA the tech sector has a larger market to expand into and uses that advantage to build world wide brands.
So many of the gains in the US markets are on the backs of a few very large companies. The rest of the US market will have similar performance to the UK.
We are missing that big growth sector.
@Jed I appreciate your situation and that £5 does look a long way away. I don't think its impossible but I would think a few years down the track.
However, for new entrants the question is whether £2 is a good price. I think in a balanced portfolio (mine is not yet, but working on it) then £2 offers a good balance of risk v reward.
£3 is not too unrealistic and would add 50% to someone buying at these levels, so I can see a case to buy.
I think you will get that 40% back and when dividends restart BT will start to give you some profit. If my math is right 40% is about £2.
I don't think it will be overnight. But definitely a long term target in the next 5 years.
I was under by 30% across the board about 2 weeks ago. At the moment I'm less than 1% under. So turn arounds can happen pretty quickly.
Well done on 888, I'm hoping for something similar with Saga. Not as good a business at the moment as 888 but hopefully if they can reduce debt could double in a few years.
As for BT, I'm probably going to let it ride as my purchase price is about 110 which when dividends restart should be a cracking yeild.
@beingthebanker - I have to agree there is a lot of positivity across the markets at the moment (with good cause). But when others get greedy it's time to review your holdings. I'm no expert but I have looked back to the referendum in 2016 to see what the impact of that was on the shares I now own.
BT if I recall did dip following that news but bounced back fairly quickly, so I'm not sure Brexit will be as big a factor in this share as it will be in some others. Conversely, Lloyds dipped following the referendum and never recovered, so I've taken this uplift to sell those shares. Take some profit and hold cash for any future Brexit related dips.
The sad thing about Brexit is that you are betting not on the performance of the company but the ability of Politicians to come to an agreement. So you can't be totally shielded from a bad Brexit without the possibility of missing out on any rise from a good one.
I'm hoping to hold about 1/3rd of my assets in cash, that way if there is a bad result and shares like BT dip I can top up here in the expectation that it will follow a similar path and rebound quickly when markets realize that not all UK shares will be impacted to the same extent.
Similarly if there is a good deal then you can get a rise just not as big a rise from the shares you hold.
I'm gutted I did not buy back into 888 when it dropped to less than £1 on the COVID news, so if something like that drops on BREXIT, I'll be in like a shot as they are a cash business with very little debt.
It may also fairly quiet as the chat functionality seems to be down across the site every day at the moment.
2 more days like today and I'll be happy as I will have reached a point were I can reduce my hold to a more reasonable balance within my overall portfolio.
But still a long way to go for LTH's who lost out during the drop from pre-Covid
No one needs to work out their average price in old or new. Most trading platforms tell you how much your holding is worth.
So all you need to know is how much you invested and work out the difference between them. I had a nice surprise today to find out I was only 10% down on my investment not 20%.
So think my break even is roughly about 270.
When we hit that I will probably sell half my holding as I never intended to have so much in one share (I got greedy).
Lesson learned though averaging down is not a clever strategy, better to find an alternative investment.
The last 2 days have dug me out of a hole across my investments so now only sitting on a small loss rather than 30% across the board.
I think you could invest at these levels and make some decent money, but I would be shocked at anything north of 300p before the interim results next year.
I think the market feels that the risk of default has deminished, but to hit anything like 600p this share in my opinion would need to start paying dividends, which will require some very positive cash flow and profits. Which I think could be at least 2 financial years away.
You can imagine some of the bigger private investors will have lost money yesterday being unable to access their accounts and make trades.
Fund holders will be fine but share dealers will have been pulling their hair out as some shares hit key targets to buy or sell.
What's happened today?
Fair enough if you think there is value in them. Ive averaged down myself before but it was looking for a palatable exit point as I had lost belief in the share itself, which makes less sense.
I'm still working out investing after 5 years, how to place a value on a company and knowing the difference between oversold/undervalued and a fundamental drop in share value.
I get the psychology for averaging down as no one likes a loss. But logically it makes no sense unless you believe the stock is under valued.
Otherwise you may as well invest any additional capital in another share.
Averaging down always feels like throwing good money after bad.
May reconsider my planned share purchase in 2 weeks given the lockdown news I can see this dropping again.
Hi Jason, shares are trick little blighters. Always hard to tell which way something will go.
Everyone who buys does so as they feel the upside is more likely than the downside.
I was on a great run during march and April was nearly in the black then boom down 33% across all my holdings. Bad pick after bad pick.
LGEN, LLOYDS, SHELL, PFC..... SAGA (truly shocking)
But you have to either pack up and buy funds leaving it to the professionals or hold you nerve and wait.
I'll be buying some gsk in 2 weeks (need new funds to become available).
I maybe insane but I think most UK stocks are getting the double whammy of brexit and covid. So really your not betting on gsk your betting on the brexit deal not being a total **** up.
Gsk is a good income stock but a bad brexit outcome will hit the stock as who wants to pay 10% more for health products.
But all that said, even with another 10% fall if you can take 6% dividends then in 2 years your back in profit without the share value moving an inch.
So just ask how long can you afford to hold for?
It is always difficult to be patient with shares as we all want that positive outcome. But in the current interest rate environment it is difficult to find better investment opportunities.
I think BT has a good future both in terms of income and capital growth. The telecoms industry is not likely to disappear overnight so happy to hold this for a 5 year time line.