Member Info for strictlybricks

“MNG , PHNX, AV, LGEN.....I hold all 4 and top slice or sell/swap if and when opportunities allow.”

“Try to make 15% + per year.”

………………………

Armani,

I don’t look to include AV., regardless of how good an investing prospect it may or may not be for the future, because it’s dividend yield is not “in the zone” ~ as detailed in my reply to Couerdelion just now….

Whereas I did feel confident to call value on individual house builder shares when I was investing in them and allocate book value weightings according to their varying underlying performances, I am not able to similarly divine perceived best value when it comes to the insurance boys ~ though I am aware that there are others who comment here who do seem confident to do this…?

So, my single yardstick is dividend yield, given that I have enough comfort that these companies are all FTSE100 and have been around for donkey’s years and are very committed to getting their long term dividend policies right (in stark contrast to one or two house builders that, in my view, have effectively been run by individuals who have used unrealistic, shorter term high dividend strategies in their own personal financial interests to bamboozle the investing public ~ but I ain’t going there on that one…!).

With regards to your comment about looking to make 15% a year…

Up until recent years, that had been my passage planning rate too ~ right from the beginning in 2000….

And I have managed to better that, at an average of 17.1% a year, to date…

However, in my view, the house builders’ golden age endured for forty years but seems likely to be over to some degree, which is why I’m now in the insurance boys…

And, for these, I’m now passage planning at 12% a year, being the 10% or so yield I bought in at plus the 2% a year intended growth of the dividends which allows for the yield not dropping…

As I said a couple of comments back, trading between the house builders added around another 5% to 6% a year gain on average, and I am looking/hoping to be able to continue to achieve this with the insurance boys ~ in which case, that would get me back to a 17% average…

But I can’t rely on that ebbing & flowing of relative perceived best value to continue to work in my favour ~ for example, LGEN, MNG and PHNX might all drift away from each other, as AV. has done, and therefore no longer remain players for me…?

Hence why I’m passage planning from here at 12%, which is good enough for me if a tad unexciting compared to the past, and that just relies on these companies continuing to do a “Ronseal”.

Strictly

"....I would be wary of making wholesale shifts from one stock to the others for fear of missing some of the individual company moves - for example the 17/03/25 jump in PHNX."

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Couerdelion,

I omitted to comment on this in my previous reply ~ an oversight ~ but you have picked a good case in point here… 😊

At the start of play on 17/3/25, I had around 40% of portfolio in PHNX but it was all sold that day to go into LGEN and MNG….

Reason being was that the PHNX price bounce took their yield from 10.6%, which was higher than LGEN’s & MNG’s, to 9.6%, which was lower than their’s…

They were all pre ex-div date, so that didn’t complicate things…

Since my previous comment here, I have sorted MNG’s performance into my spreadsheet as a benchmark share as follows:

For my own gains, I track what £1,000 invested at the start would be now if it had remained fully invested, dividends reinvested, and no tax paid…

But, anyway, a £1,000 initial investment had reached £46,428 by the start of 2024 ~ which was when I started investing in insurance boys, so that’s the figure I started MNG off at.

By the end of 2024, my figure had increased by 20.3% for the year to £55,858 whereas MNG had fallen to £44,571 having lost 3.2% including dividend reinvested.

For 2025 to date, I am up by 15.1%, and the figure is now £64,289, whereas MNG are up by 7.7% to £48,013.

The above is distorted for 2024 by the fact that I didn’t start with the insurance boys until February that year ~ by which time I was already 16% up having been fortunate enough to have been fully in Redrow at the time of their takeover announcement, but never-the-less I am very happy with the outcome so far…

I appreciate that this approach is probably not for anyone who is uncomfortable with taking a view on these insurance boys based purely on their respective dividend yields…?

But, for myself, I did have around twenty years solely in house builders’ shares and during that time I distilled things down to being all about the progress of the book value of a single share, adjusted for dividends.

So, that came down to a single yardstick too..

Doing that really did cut through the cr.p ~ it clearly showed the companies to avoid, like Bovis & Crest, and which ones were really doing well, like Bellway & Redrow, even though the market didn’t necessarily recognise that…

Not for nothing did Bellway acquire the nickname “Ghostdog” in our investing circle..!

Strictly

Couerdelion,

Fair enough ~ I well appreciate that this is not a strategy that suits everyone and also, as a relative newcomer to the insurance boys, it has pretty much only worked for me on paper thus far based on the share price tracks of the three companies concerned…

Although, having said that, my recent shifts from LGEN & PHNX into MNG are very much on the positive side as things stand ~ and that’s after allowing for having swerved LGEN’s ex-div date and so not being eligible to receive that…

But I do have the numbers for the house builders…

Having started in this managing-my-own-investments malarkey in 2000, I didn’t have my “Only invest in housebuilders..!” epiphany until 2003, by the end of which year I was already 22% behind Bellway ~ which has been my benchmark share…

And by the end of 2008, having very much backed the wrong horse (Barratt) through the credit crunch (painful… causing me to sell my home and relocate), I was a whopping 59% behind Bellway (this is relative performance of each ~ adjusted to include dividends being reinvested).

However, since the start of 2009, it’s been pretty steady overall progress in firstly catching Bellway up and then overtaking them by 2014.

The covid tsunami helped ~ and gave me a significant shift further ahead of Bellway…

And, as of close of play on Friday, I’m now 134% ahead of Bellway since the start in 2000…

As I’ve said, though, this was in the house builder sector until early last year, and I have yet to experience first hand how well this will go in a different sector…?

Maybe it’ll be something I’ll comment on here in due course…?

But just writing this now has sparked the thought that I now probably need to also set up a benchmark for the insurance boys…

And that will likely be M&G ~ seeing as it’s been the best performer of the three over the past five years or so…?

Strictly

"....While it does we can treat it as a premium rate interest stock and collect our 9% dividend with perhaps a few more % of capital gains"

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Couerdelion,

I agree entirely with what you have just said here…

Only I would add that, with three big insurance boys all on very similar dividend yields, there is opportunity to move between them when relative perceived value gaps open up between them ~ as they do from time to time and we’ve have just had one between M&G on the one side and LGEN on the other (and this is just since 24/4/25, after LGEN's ex-div date) that is now closing again ~ to look to make extra gains…

This was my approach for twenty years investing exclusively in house builder shares, a game I came out of just over a year ago as the medium term, and maybe longer term, prospects seem not so good for house builders…?

That’s certainly as per both recent results and the scribblers’ forecast for the next three years…

Outside of my own investing circle, I don’t think I particularly came across anyone else who was deploying this so intentionally, and I’m wondering out loud if anyone here on these insurance boy share chats does so….?

You can put together a share price graph to compare the price movements of the three insurance boys using the Stock Exchange graphing tool (a very useful bit of kit ~ and it’s free…) and it’s there to see that similar opportunities have existed in the past to trade between them as with the house builders.

But, that’s somewhat different to actually having spent many years doing it…

With house builders, once I reckon I’d finally got my act together in 2009 having got it badly wrong through the credit crunch, it’s not easy to call the additional gain made from trading as I did largely manage to swerve the covid tsunami whereas Bellway, my benchmark share, as a company had to take the market reaction on the chin…

But I reckon that paying attention and trading between the house builders brought an extra 5% to 6% a year on average to the pot…

So, if that 5% a year is achievable with the insurance boys, on top of the 9% yield and the 2% implied annual gain based on forecast dividend increases, that’s 16% a year on average and to me that’s a very happy prospect… 😊

But, is anyone else here doing this and, if so, have you been doing it for longer than the new kid on the block ~ me! ~ and, if so, how have you done in terms of extra gains..?

Strictly

“my strategy is capital growth from total portfolio return. average compound growth since 1979 has been 13.25%.”

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alas,

i’m impressed with a) that number, b) that you are able to quote an average return and c) that you are happy to put the figure out there…

i am a relative newbie to managing my own investments ~ having taken control of my own investments in 2000 having previously been with various fund managers up to that point…

so, while i’ve compounded at a slightly better rate, 17% a year, it’s over a much shorter timescale and so it pales against what you have achieved overall...

and my “passage planning” rate from here on is significantly lower ~ at a more humble 12% a year…

for anyone not getting the scale of the numbers involved here, it means that, for me, every £1k at the start has become around £57k (obviously before money drawn down ~ i’ve had to eat in the meantime…) whereas, by my calculation, your game has taken every £1k in 1979 to over £300k as of now…

this is how warren buffett did it of course…

he must have been a really annoying kid, seeing as he’s said he always knew he was going to be very rich, simply because he always understood einstein’s 8th wonder of the world…

but when i’ve come across folk bigging up their investment performance, i generally say something like “okay, give me just one number ~ which is your annual rate of compounding from the start”, i’ve only come across one other person who was able to do that…

it's a bit like a pea**** strutting his stuff with his feathers in front of a couple of peahens…

and the peahens say to him “never mind all that crap ~ show us your willy..!”

so, while your number might have slipped by some folk, it certainly hasn’t slipped by me…

and, as i’ve said, i’m impressed…. 😊

strictly

"It’s of such adult content and graphic nature I’m uncomfortable with just copying and pasting, so you’ll have to read for yourself. It’s the very final paragraph upon page 30 of the report and beings with the words, “On April 18 2024…. "

...............

You might have thought that they'd have tried to write that bit in a smaller fo't in the hope that investors wouldn't notice it...?

I didn't get anywhere near that far with the report..... just the essential numbers were a great enough work of fiction for me....

Re Rice, etc., it would be good if Saka is fit again in time for the Real Madrid game... I'm not holding my breath though....

Strictly

Svend, I've got to hand it to you....

Your capacity for glass half full optimism seems unbounded...

In the meantime, being a somewhat wussy investor, I'm happy enough looking on from the safety of the sidelines....

Never mind hair cut ~ I don't want to be scalped..!

Strictly

"Vistry/Bovis might just be the corporate equivalent of an old lawnmower"

Svend,

I think Vistry specialises more in hair cuts than lawn cuts...?

For investors, I mean...

Strictly

Trouble is, Svend ~ Vistry/Bovis has been misfiring for the past twenty seven years......

Strictly

Thanks for that, Crossley...

………………….

To take it to its conclusion, if your numbers are correct, another way of putting this might be to say that they've spaffed nearly twice as much on overpaying for share buy-backs as they were actually left with for profit...

Well done Battersea....

No bone for you, then, let alone any cigar....!

My calculation was as follows (you'll know well from the blog that I am prone to senior moments ~ in case you’d like to check my numbers… 😊 )

£194.4m cost less £107m current market value = £87.4m loss, divided by 328m shares in issue = 26.6p a share p.ssed up against the wall if the company liquidated at current share price…

This seems to be only replicating what Inland Homes did just a year or two back….

And they went t.ts up soon afterwards…

I remember that as there were one or two investors amongst our crew who were still holding some of Inland's shares at the time…

Unsurprisingly, they weren’t too happy about it…

Strictly

Sorry - that should have said Svend…

And I didn’t notice that, just like a supermarket trolley, spellchecker seems to have a mind of its own…!

Strictly

Scene,

But I think “why take chance?”…

Einstein had a view on this…

Something about keeping on doing the same thing…

Strctly

Firstly, my apologies for being like a dog with a bone about this, but I decided that I wanted to try to properly nail my point...

……………….

And also, I'm sad enough to maintain a history of scribbler forecasts for a number of companies in my spreadsheet ~ and these happen to include Vistry.

So, it was easy and straightforward to pull out these figures ~ which may or may not still be available now on Google…?

Putting scribbler forecasts for Vistry EPS for the past three years ~ as they stood a few months before each year end in each year for the past three years ~ against the “reality check” EPS figures (calculated as described in a recent comment further back), I have the following:

Scribbler EPS forecasts:

2022 144p

2023 93p

2024 90p

Reality check EPS actual figures calculated from the accounts:

2022 Loss (115p)

2023 59p

2024 16p

Now, I’m not suggesting that the scribblers are wrong in their forecasts ~ after all, who am I to say? ~ and that, from here, Vistry will do anything other than to soar up into the sunny uplands of high earnings and superior returns on capital…

But I am very much a rear view mirror investor, and I have much more trust in the clear picture that I can see behind me than I have looking out through a very murky windscreen at what’s coming down the pike through the thick fog of the future…

And in that rear view mirror, I can look back decades for Vistry…

And it really ain’t great… ☹

Strictly

Typo alert....

I've just re-read my previous comment and realised I had a senior moment ~ I do tend to have a few of these ~ when I wrote: "Average return on equity 2013 to 2014..." which, of itself, is hardly an impressive timescale...

That's because it should have been 2013 to 2024...

With regards to Pedro's comment, it might be interesting to see what the assorted scribblers were predicting for Vistry in advance of the results each year for the past few years ~ i.e. before the reality rose up and kicked them in the goolies....?

Strictly

Wealthmaker,

As you seem to be of the same view about Vistry as me, you might like a few other “Reality check” numbers (that I consider to be particularly useful) to note in your “Don’t do it..!!!” memo to yourself for whenever you might be tempted to buy some Vistry shares (and follow up with a cold shower just for good measure 😊)…

Average return on equity from 1998 (when Bovis was first foisted onto the market) to 2024:

Vistry 9.9%

Bellway 15.7%

You might like to think that, given a shorter timescale, Vistry might have been able to close the performance gap…?

Nah….

Average return on equity 2013 to 2014 (I’m using this specific time period because I already have the details for that in my comparison spreadsheet):

Vistry 7.4%

Bellway 14.5%

Nightmare..!

My apologies to Vistry fans, but I have not been a member of that particular club since 2015 ~ following my lucky escape once I’d fortunately put all these numbers together and seen the light…

Strictly

"Spouting 1.3 Million.....a pathological liar."

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Armani,

I don't disagree...

But perhaps more to the point, who is going to pay for them...?

Right now, as a very approximate overall amount, but in order to underline what I'm suggesting here, the house builders are putting around 10% of the cost into the pot....

Because that's roughly how much less their return on equity is compared to long term historic averages...

Will that subsidy from them continue into the longer term...?

Who knows, but the scribblers believe that that's the case for at least the next three years...

And if the house building industry drifts into being a sub 10% return sector for the long term, what is fair value for that for shareholders...?

I would argue that a PBV of less than 1 would be appropriate against the value of other investing opportunities out there in large well established FTSE companies...?

Nothing too exciting or exotic, I mean...

I hope I'm wrong about the long term prospects for builders ~ but this does mean I only have a small fraction of my dosh in house builders now ~ whereas, as the name implies, up to just over a year or so ago, I was previously pretty much 100% exclusively invested in that sector for the previous twenty years or so...

I would like to think the house builders will recover their bottom line mojo in due course ~ but I'm not hopeful while under this government...?

Strictly

"The buyback was originally supposed to be concluded by 05/25. It’s now been pushed back to H1/26. So they’ve just slowed down the pace of the buybacks"

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Crossley,

Maybe the shares are too cheap currently for them to buy back at the moment...? 😊

Strictly

PS

Paul ~ I just had a quick butcher's back at the share buybacks...

Bl..dy hell, just six months ago, Vistry were merrily buying back their own shares at more than twice the price that they are now....

Assuming that the directors do actually have a grip on the underlying prospects and performance of their own business, was buying back shares at those prices wise, reckless or foolish...?

Answers on a postcard, please....

I can't be ars.d to try to do the calculation myself, but I'd be vaguely curious to know just how much shareholder capital has been spaffed in total in the process based on the share price as it currently stands..?

Strictly

"Seems an odd strategy to keep shipping cash out the door when knee deep in debt and have a substantial interest cost as a result - their "average daily debt" is £700m. "

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Paul,

You could maybe liken that to a country who's economy is going down the pan, spending its foreign reserves buying its own currency back to try to keep the exchange rate up...?

Only, in Vistry's case, it clearly ain't working....

Strictly

Having taken a look at the reality check numbers for Bellway just yesterday ~ which were IMO steady as you go, grinding out a long term recovery, hopefully ~ I had a similar look at Vistry’s today...

................................

I have to declare my rather jaundiced view of Vistry here ~ which will no doubt fly in the face of any Greg Fitzgerald aficionados reading this…

A decade back, I had been guilty of owning some Bovis (as they then were known…) but have been fortunate enough to have swerved them ever since 2015 when I sold the last of mine….

But I’m only talking numbers from RNS reports here ~ so surely any issue would perhaps be with how I calculate these and whether I’ve made a mistake..? (has been known…)

Taking balance sheet equity of £3,235.9m and knocking off the goodwill & intangibles of £1,196.4m gives net tangible equity of £2,035.5m, divided by 331.243m shares in issue at end December gives BVPS of 615.7p.

With no div paid in the year and less the start of year b/f BVPS of 600.1p gives reality check EPS of 15.6p against declared EPS of 22.0p.

At the half time whistle for 2024, the h1 EPS figure, calculated this way, was 29.3p.

So, the reality check loss per share for the second half was 13.7p.

I appreciate that some might not think much of how I calculate these metrics ~ which are the vital ones IMO that matter to me ~ but I reckon that, overall, these metrics have kept me pretty safe in this game for more than two decades.

Another issue with Vistry for me is the leveraged balance sheet… total liabilities are 138%, more than twice the norm for this sector.

I appreciate that Greg waxes lyrical about “Capital-lite”, and what do I know ~ after all, I’m just sitting here writing this in my dressing gown ~ but, as far as I’m concerned, that’s all just b.ll.cks…

But, fair do’s to the man, he seems to still be getting away with ~ it seeing as Vistry’s ROE for 2024 was a princely 2.6%, the share is on a stratospheric P/E of over 40 and the price to book value at around 1.0 is significantly higher than that of Bellway ~ a company who’s performance has been running rings round Vistry’s for decades…

So ~ good luck to all those here who believe in the triumph of hope over experience.

Strictly