Member Info for mole_man99

Regarding debt interest query, I assume you are looking at the net financing costs which fell due to gains on options held to cover the convertible bonds, due to a higher share price at the time. Mark to market rules. Now the share price is lower, with mark to market they will take a loss so net financing will probably increase, but will depend on the SP at period end.

Net financing is not debt interest. Debt interest can be found on the cashflow statement and is larger unchanged at €2.15bn

Hope that answers your question.

cheapshare, you've always got to look under the carpet with VOD accounts. Net debt may well of decreased €1.5bn (Euro not GBP), but in the year they closed the €2bn convertible bond and received cash from towers, so in reality, debt went up. It should of decreased €4bn at least.

Hi Fleccy
Unlike a mine or property company who may have a big write-down and then it is done with, VOD will be adding to the capital accont every year with upgrades, new sites, 5g spectrum etc, which then need to get written down.
Despite Dep and amm of billions of Euros past 4 years, the intagible assets and poperty plant and equipments accounts have increased €18.368bn last 4 years, which will be depreciated and ammortised according to GAAP and local tax rules.
Depreciation and ammortisation charge is likely to increase moving forwards, not decrease.

Hi Dan
I think I did explain.
VOD PE is 336 (updated from 350 quoted on fundamentals tab, as PE changes by the minute accorindg to SP and exchange rates)
PE is a backward looking metric as it is calculated on most recent earningns, and therefore already in the past.
The 12 PE someone else quoted is a forward PE. A 'what-if' PE based on forecast earnings. Of course, forecast can and will be wrong, so forward PE is just a guide of what the PE may become if VOD results come in as expected.
A forward PE lower than the current PE suggests a companies earnings are expected to grow. It does not guarantee they will of course.

PE is taken from fundamentals tab, which is not updated daily. Current PE with latest SP, exchange rate and shares outstanding is 336.

Hi Dan.
The PE is currently 355. It seems wrong when you divide the FY profit by the shares in issue, but is correct for current PE, based on most recent FY figures.

From FY21 accounts, on which the current PE is based, profit/loss for the year was €536m, but only €112m was attributable to 'owners of the parent', the shareholders. This give the PE of over 350 for the €111m that is yours.

The other €424m is attributable to 'non-controlling interests'. Probably to do with subsiduaries, like India or SA.

Vodafone accounts are filled with little gems like this to trip up investors using traditional valuation metrics which do not go too deep and make it look undervalued.

The forward PE is down to what you think the forecast earnings for '22 will be. The 'non controlling interests' get around the €400m figure, so if VOD makes €2bn, then €1.6 may be attributable to shareholders, so a forward PE of around 22. The convertible bond will increasse that PE to about 24.

Concentrate on the trading statement Friday. You want total revenue growth, not just organic, to exceed at least 3%. The growth comparison will be Q1 21 against Q1 20, which was pandemic hit, so anything other than good growth compared to that quarter may be seen as a fail.

T'was a little jest about the charting comment Dan. I know you love charts.

I can hear Dan banging his keyboard from here...

What could the company taking it over buy, with all that debt to pay off or absorb? It is highly unlikley they could come up with a value high enough to get shareholders to approve it.

Charmed
Roll on trading update 23rd to give something tangible to discuss. Meantime VOD wil go with the market, which is mostly glum today.

Interactive investor did an article today about their clients funds. Year to date the best performing cohort are the younger investors as they are more likely to hold funds and investment trusts, so you may be onto something.

Rewatching some old Buffet interviews, he does suggest if you can't identify a small number of great companies then most investors would be better just investing in funds.

Your feelings about individual shares are mine too. As retail investors, our information is so limited that we always run the risk of holding something that is going bad, but we don't know it yet. I limit any of my holdngs to 5% max of portfolio to reduce the negative impact if some unexpected negative event hurts and individual company.

Robleo, it's difficult to say picks as you can't just rush out and buy them today.

I can say Nvidia for example, but it's had such a run that now is probably not a good time to buy. I am certainly not adding. Within chips though it is the future winner, so do your analysis, set your buy in price and wait, because I think the markets are starring down the barrel of a gun. There is potential for a big downswing from some economic tripwire. Wells Fargo today closed all personal lines of credit. The last time they did this was 2006, which turned out to be one of the unseen warning signs for the financial crash.

I am in many disruptive tech and growth companies stateside. Companies that will benefit from tech cost deflation (read up Wright's law). Indebted old tech companies who spent out cash on divs and buybacks instead of investing will decline as they must lower prices to compete (sound familiar).

If researching a whole new future world is too much, then go for an ETF like Scottish Mortgage Trust SMT, who pick a selection for you and have a proven track record. I would also say ARK ETF's but you have to have a US brokerage account t buy them.

On home turf I have past industry exerience so own commercial property companies and house builders as I understand when they are over or under valued, but again at current prices most are topped out for now. I'm not buying but not selling. Use your own personal experiences from work or as a consumer to target companies in sectors you understand. Look for value in those sectors/companies. Wait for the price to come to you.

I have some opening economy plays in UK stocks too, but again the prices have all run up to points where I would not buy just yet. Look around and see what you can see. Is there a queue for sausage rolls at Gregg's? Are your friends booking holidays, what are your friends all buying/talking about (what are you buying)? Who makes those products, or is part of that sector?

You have an edge, personal knowledge, don't squander it. Don't go out buying genomic researchers if you are a car mechanic.

You can't predict when the next big downturn wil come, you can just be ready for it. Have your favourite companies lined up with a price in mind after a bit of inspection of the figures and wait for that price.

But do stay invested in something. I would not suggest 100% cash. I am trying to get to 30% cash as firepower to top up the favourites when the unknown event happens. If it feels closer I may go 50% cash, but 'never never get out of the stock market', Jack Bogle (look him up)

I could go on, so perhaps it's easier to say, any questions?

I won't say my target as it will be seen as sensational. It's the low point at which even I would admit the risk is worth it. It may never get there. Above that I personally have no particular interest in tying money up in VOD.

On July 23rd release, if it can show an increase in organic revenue growth across sectors I may raise my target, but it is likely still below today's price.

I do have an entry price Dan but you won't like it. If it never reaches that level, I am OK investing in the alternatives.

July 23rd will be a kick upwards if organic revenue growth is going in right direction. I think that is what big money is looking for. Years back, it used to be all about the 'churn rate'. How many customers they lost and new ones signed up.

General market seems to have switched back to expecting low rates for a long time, so high div shares should be attractive. AJ Bell put out a note to clients though warning them to be wary of high div yield stocks. There is usually an inderlying issue leading to a div cut. Vod was on that list.

They say
" forecasts of yields in the region of 10% may make investors a little wary, given the shocking record of firms previously expected to generate bumper returns, including vodafone, shell, Evraz"

My usual mixed bag of up and down for you.

Agree. You should of sold 20 years ago at £40.

Locals will not allow an open pit mine in Clontibret. Get out on the JV confirmation pop or face 10 years of twotter posts of people chained to fences. The poor Turkish lot have no idea how it works in countries like Ireland. You can't push through something like a mine like you can in Turkey. They will have to 10X their budget, and Conroy will have to 10X shares to keep in the game.

I'm looking at a funless summer for equities and VOD won't do well in that environment. There was a brief flurry of excitement last week or so as it looked like growth stocks may get going again, but it's deflating fast. It's back to normal ways where markets drift through the summer.
Trading update on 23rd July may give it a kick. You really need to see organic revenue growth come back to more than just Germany, otherwise the big money will continue to avoid.
Is my personal feeling.

HRN have written to retailers to raise prices 10% as shipping issues, costs and commodities eat into margins.

SIDI, shares in treasury can be confusing. Tresury shares do still exist so count toward the share capital (funds originally raised from selling the shares the first time), but they have no voting rights or rights to dividends or any other capital distribution, so effectively for common shareholders they reduce dilution when in treasury, and will increase it if they get issued.

VOD won't cancel them as they do have that conertible bond coming up, and would just have to create new shares then to satisfy it. Companies that cancel their tresury stock do so because they don't need them for future issues and are financialy robust enough to cancel them from the balance sheet.

A good few posts back on this eventful day, I see SIDI you are saying shares from or put into treasury have no effect on dilution. They do.

Shares held in treasuary do not count toward shares in issue and do not qualify therefore for dividend or count toward EPS (PE) calculations, so shares purchased and then held in treasury do reduce the shares in issue.

Equally, the convertible bonds did dillute holders as shares issued from treasury then count toward shares in issue. These shares now in issue get their fair portion of dividends and earnings thus dilluting current holders.

Round 1 starting early I see