Our live Investing Matters Podcast Special which took place at the Master Investor Show discussing 'How undervalued is the UK stock market?', has just been released. Listen here.
That argument was raging when it was 1.20 and the previous buyback in full swing. The evidence from that suggests a buyback has zero effect, possibly negative effect, if you are using assets to buyback the stock.
It only works if excess capital generated from earnings is being used.
I do like the way they snuck in the inevitable div cut under the guise of a capital allocation program. It’s so 2018.
Any pensioners out there using this for income do the calculations in selling up and converting to annuity. Getting quoted 6.6% at the mo.
Not financial advice of course.
Div cut in half but still lashing out cash to investors through buyback funded by asset sale. 35p is the new target but may take a few years to get there.
Like the last buyback program, a long drawn out affair of sp decline as assets leave the company.
If they don't get earnings up they will of given away all the assets of the company in dividends long before 20 years.
The world does not stand still. A bunch of rusting masts may not be the way to communicate by then either. Starlink subscribers has accelerated to 2.6m.
They need to be keeping the cash to invest.
A 100xpe is not insane if the company is growing earings 50% pa. This is what I find UK investors fail to grasp and stay stuck in old dead industries, because they have found some sort of 'value', and it pays a safe div right?
PE is a bit of a blunt intrument to try and value growth companies anyway.
I think the worlds big companies (and definitely small) are just exhausted running their businesses right now. Few want to raise billions in capital to buy someone elses exhausting problems at a premium. Just blunder on dealing with your own 100,000 staff arguing over not coming in to the office and what pronoun they want to use.
If VOD falls to silly levels it may attract a buyer, but 70p is not silly enough, for the current world.
Hi Edochan. I lost about £500 over 20 years ago. Approx as my paperwork is long burnt. Was about 1500p a share or something, split adjusted.
So you can see, no particular amount of burning to make me bitter. In the following years I just posted here occasionally to share my thought of how an owner company can use the market to raise capital to pay themselves without really doing very much.
Yes they have a partner now, but I think it's worth potential investors considering how likely it could actually be to dig up vast tracts of ireland just for gold. In the period since I invested, pollution from and care and maintenance of tailings dams has become a recognised issue. I really think the residents will fight any application so hard it will cost millions, and years, and if they don't have the grades, the resulting mine profits would not cover the costs of appeal.
Dalradian is up to 100m I think fighting their application. The public consultation began in 2016, 8 years ago. Next appeal date is set for this year. 50,000 objections.
Just stuff to consider before going all-in on the no brainer 10 bagger.
https://www.belfastlive.co.uk/news/northern-ireland/dalradian-gold-public-inquiry-dates-28617378
CPI inflation data slightly higher than expected/hoped, so market baking in the higher for longer narrative which does hurt debt management companies.
Maybe Demir are going slow because an astonishing 30% of Ireland and similar percent of N.Ireland have prospecting licences on the land. They ain't going to allow all those mines. If Demir are not getting eye watering grades, it just won't be worth the fight to be one of the few permitted to extract. Supply and Demand.
https://igi.ie/assets/uploads/2021/03/Mineral-Exploration-In-Ireland.pdf
It's a different world out there Dan. 100,000 salary plus a family will leave most with little to spare. If your partner works too, you may have lots more, but then you have two 20k allocations you can fill. Not many working couples have £40k after tax with nothing to do with but save.
Can't see a British ISA being much interest. I reckon it's a ruse to clear out Natwest. Put money in a British ISA and you can buy discounted shares of Natwest.
So the gov announces a new british isa, so the 0.1% of people who can max their ISA allowance every year can put an extra 5000 in to British companies. We're all saved!
Wonder what a British company is? A kazak miner listed in London?
World markets are also looking at Powell speaking on Weds. The money is now on a hawkish tone. No interest rate drops any time soon when many were hoping they would start this month.
Think Div focused stocks need to settle into a world of interest rates at these levels for some time.
I agree with this. VOD still too much of a headache for an all cash takeover at premium to todays price. Interested parties will continue to pick bits off at less than the assets recorded on the books. Why pay a premium?
Indeed the cells are large and unable to support many connections, yet. It's interesting though, as just last year you would of said it can never be done, download at 17mb/s direct from a sat to an unmodified phone. Innovation rolls on like a steamroller over companies not investing to keep up.
Sell assets below book to get cash to keep paying investors. Excellent long term strategy. Why waste it on r&D.
Meanwhile, SpaceX just achieved peak download speed of 17Mb/s from satellite direct to unmodified Samsung Android phone.
600,000 spent on operations in 6 months (doing what exactly, demir do it), 262,000 cash left. Dillutive cash raise within a few months.
Maybe they do move to phase 2, but that will just increase the burn and the dillution rate over time will make any future value irrelevant to current investors. The market has woken up to this and figured it's not worth it.
They overplayed their hand turning down Illiad, got into talks over a combination which still left them with the headache of a JV and are now having to consider a sale below asset value to get cash. This is the hidden pressure of too much debt and an insane commitment to keep paying a div they can't afford.
67p, very good?
Suppose it’s a question of timing, but surely anyone who bought here for a nice safe return must be asking questions of their board. Not to mention the losses of not being invested in the broader US market instead.
Egg on face from goading goes both ways.
There is an old interview with Jim Kramer explaining his hedge fund days where openly admits if you wanted out of a position you just create some rumour or other falsehood to pump the price. Friday is a good day to do it.
Thanks for the offer. I’ll hang around so the alternative view is aired and new investors can make a decision.
Manage your risk appropriately. It’s not a no brainier multi bagger.