Member Info for mole_man99

Dan is correct.
The towers listing gave VOD a bit of cash. At the same time a mandatory convertible bond of £2.5bn converted into stock with approx (from memory) 7% dilution. Vod used some of the towers cash to buy back some of the new stock to reduce dilution. They are not buying it all back. The buyback is due to end at the end of May.

There is a second mandatory convertible bond coming also for £2.5bn in March 2022.

Markets reaction seems more focused on lacklustre forward guidance. USA in particular has been trashing companies giving low forward guidance on earnings day, despite record earnings at the time.

For myself, the results confirm for me what a drag the debt is on their abililty to move ahead. Mature companies today need to be investing hard into future tech, but VOD is already on maximum credit.

They really should not be paying a dividend, but investing what cashflow they apparently have in the future, be it spectrum or satelites or tie-ups for mobile entertainment.

Elon is setting up a telco. We get our internet of a 4g modem with VOD unlimited data card, but are moving a few miles further from the mast. The signal is too weak there so I have subscribed for starlink.
It's coming.

VOD continues to make hidden losses. Despite showing an accounting net profit, the balance sheet shows accumulated losses increasing, and net assets decreased even after adding back in the divi cash paid out, and supposedly unlocking value from towers listing.
The pattern of needing to raise debt to pay a div will have to continue for now.

Copper has been range bound for 15 years. Sitting right at the top of the box, if it does breakout, the continued uptrend could be strong, even parabolic.

It is driven by the stockpiling school of thought. Companies are stockpiling what they can of all commods, from lumber to copper (lumber up 3X), to beat supply difficulties and inflation worries. The stockpiling of course creates supply difficulties and inflation. It will eventually lead to a destocking and correction, but that may be next years problem.

It is starting to look like I may actually breakeven on my original EMED purchase :) I forget how long it has been.

From earnings season in USA, comms co's seem to be doing OK. Maybe it bodes well, and towers creeping up in value.

While VOD's 3 systemic issues will remain (debt debt and debt), I feel slightly positive for you for earnings this time around. UK on a bit of a roll too. It may provide the micro climate for a little push up in the SP.

Long term view remains cloudy though. They need to get that EBIT firmly up, then move on from there.

Because Blackrock want it, it turns out.

Over a decade of happy ownership here coming to end now it seems. They marshaled themselves well through various property crisis. Shall be sad to lose it from the portfolio.

Janet Yellen sank markets in the afternoon by suggesting rates may have to rise to cool markets/economy when Biden's $4trn stimulus package hits.
Rates up makes divi stocks less attractive.
Tomorrow it will probably all reverse. It's a grinding market that may last till the Autumn.

That's the problem for me, it probably can't do much without borrowing even more, especially if it continues to pay out a div.
Axing the div should not effect it's credit rating as it retains cash to pay the debt which is what the credit ratings agencies are looking at, it's ability to pay.
I would axe the div, and get involved with Iridium before they get too big. Low risk way into satnet as IRDM have done the groundwork and have the experts. VOD bring marketing power to the table.

Just to say Robleo, am not saying not to buy a good fund like SMT and do it all yourself. I have ARK myself, and probably rotating some REIT gains into SMT from May onwards, as the REITS have made their accelerated gains from pandemic lows and will now get overtaken by others.

Both ARK and SMT get the future, the Exponential Age of network adoption effects in new disruptive tech. My constant gripe with VOD is that they could be part of this big time, but saddled with debt and an old world need to pay out divs, they are missing the boat.

No expert me, but alot of those fund managers can be pretty poor performers. I see though you are into Scottish Mortgage. They are basically the UK equivilent of top performer ARK invest, targeting future companies.

Most of their holdings don't pay divs as they are too busy investing in the future. Nio has made it to number 9 in their holdings which I have a percent of my portfolio in. No hope of a div as they invest billions into battery tech and EV's. The companies doing that today will be the giants of tomorrow and SP gains will heavily outweigh a few percent div and a flat or declining SP.

Scottish Mortgage are also good example of diversifaction within a main theme. Over 50 holdings of disruptive tech with largest only 6.2% of portfolio. 345% return in 5 years. Respect.

Some interesting discussion about various investing tactics. Being VOD though, getting a div off this or any other stock always seems to be a priority.

Investors, long term or retired should not see divs as the only way to get an income from stocks. A div is just a tax efficient way to distribute money. A company can retain the cash and invest it in new projects that create growth, and the investors div then comes from increased capital value. The only trouble is the investor has to sell some to get some 'income', and many are not very good at selling stocks. FOMO kicks in.

Personally I target many companies that do not pay divs, because they have too many good ideas to invest in. Apart from property/REITS, a company that pays a div has often run out of ideas for the future and can't think of what to do with excess cash, if it truly is excess. VOD should be investing in satellites, not paying a div for example. Perversely they borrow to pay the div, but I would respect them more for borrowing to create the spaceX busting low latency global satnet network. That's sounds exciting, I may even invest.

The tax efficiency of divs is questionable too. Get yer divs or sell stocks within an ISA or SIPP, and you pay no tax on either anyway. Selling stocks in a normal account only generates tax if you exceed the CGT limits. If you are paying higher rate tax, getting the div may be worse as the tax free limits can quickly be exceeded. Big grey area.

Watch out for long term bifurcation in the stock market, where old world companies paying divs and doing buybacks become financial black holes, and companies aggressively investing in the future consistently out perform, but don't pay divs, so you do have to periodically sell some gains to get an income, if that is what you need.

Some scary large holdings quoted. Diversify chaps. It works.

Turkey distracted by virus matters just now. I expect you'll have to wait a bit longer, if it can happen at all.

That will explain the run it had today. 3.5% up after sitting on it's IPO issue price.

No company would ever want to merge with Vodafone debt.

BATS has non-combustibles and can get into weed and CBD so can deal with a trend away from cigarettes.

Biden is a bit weak on his pet issues too. He proclaimed the whole government fleet will go full EV, then gave the contract for USPS vehicles to a diesel engine company, because it was cheaper and he probably couldn't deal with the lobbying.

I would suggest the buyback is having an effect by adding support. Without it the SP may go down. It's scheduled to end in May, so it depends what the market is like by then.

So buy Rio Tinto?

1/3 of the way through the buyback program which is probably offering some support. Looking at schedule of transactions MS buy small lots throughout the day.
What may happen when it finishes is an interesting thought.

Surely it effects margin and makes a nonsense of the fundamentals the listing was based on. Smells a bit fishy they waited till after the IPO.
Not even a month old and mangement are proving to be untrustworthy.