Member Info for tacly

Me too. Current price is not far from the low of 1374 in March.

My thinking out loud.
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The share price was ~ 220p for about 2 months before the interim result came out. Today it is ~ 194p. So ~12% drop since then.
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Looking at the money, from H1 2020 result https://www.legalandgeneralgroup.com/media/17912/hy20-slide-template-finalcms.pdf:

Page 5 - LG gets its Operating profit from: Retirement (LGR) £721m, Investment Management (LGIM) £196m, Capital (LGC) £123m and Insurance (LGI) £88m. In the result, LGR up, LGIM up, LGC down, LGI down.

Page 15 – The biggest down was LGC (-£50m) due to COVID-19. Estimate pushes this to -£60m.

Page 16 - The next biggest down was LGI (-£46m) due to COVID-19 insurance pay out. CoVID-19 future claims pushes this to -£80m.

Page 13 – LGIM up a bit (+4m).

Page 9 – LGR up (+£66m). LGR comprises Institutional (LRRI – up, +£61m) and Retail (LGRR – up, +£5m). Profit up due to a variety of factors detailed on that page.

Page 8 – Overall H1 2020 Operating profit down -6% compared to H1 2019.

Page 18 - LG said ambition is for a similar performance in H2.

Page 6 - Dividend should be safe given its 1.7x cover.
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Conclusion: Biggest earner LGR (£721m). Biggest winner LGR (+66m). Biggest loser LGI (-£80m). Biggest cause COVID-19.
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My guesses for the next 6 month:

1) If UK housing uncertainty remains (COVID-19 impact unchanged, wet Autumn and icy Winter so less building work)
2) And the mortality rate is worse (death rate in winter is always higher + COVID-19 + mis-management)
3) And LGRI’s new PRT business continues to drop (page 10 – H1 2019 was £6677m, H1 2020 was £3424m) –sale for the biggest earner wasn’t good
4) And no vaccine before March 2021.

Then LGC and LGI may continue down with LGI getting worse. LGIM the same. LGR up a little. LGR profit may balance out LGC and LGI loses but not enough. So end of financial year result may be a down, -6% or worse.

Given that H1 2020 Operating profit is already -6% compared to H1 2019, COVID-19 risks the same or worse, the biggest earner LGR’s H1 2020 sale wasn’t good and that LG said their ambition is for a similar performance in H2, may be the current price of ~194p is a fair price (6% known drop + 6% risk margin)?

So the best the share price may get to short term is the level when the interim result came out i.e. ~220p. The share price many yo-yo between 180p and 220p due to COVID-19, US election, Brexit, bad final result, vaccine...

For me, in the short term, if the share price drops close to 180p, it is a definite buy. Anything between 190p and 220p is a toss-up. In the long term, once the COVID-19 crisis is over, LG should returns to its long term average P/E of 10.8 which, at the current forecast EPS of 26p, the fair price for the share long term should be ~280p. So 194p may be an attractive entry point for the long termers. The dividend yield of 9% at today’s share price is an excellent return while waiting for the share price to recover.
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Wisdom of the crowd, please sh

Beigene has a Hong Kong listing. Its market cap before the HK listing in August 2018 was about 9.5B (see https://ycharts.com/companies/BGNE/market_cap ). HCM doesn't have a HK listing, will not move to a main LSE listing and been doing quite a few self-harm in the last few years by selling off its shares for cheap.

I could not find any updated figures since the release of the 2020 H1 result on 5th August so I guess the drop in the last few weeks is purely due to investor sentiment caused by COVID-19 panic.

If one is buying for the dividend now seem the perfect time as the current price of 180p and a dividend of 17.57p mean a dividend yield of 9.76%. My average is 193p and I am happy to continue to average down and hold for the long term. Those that said “These guys rely on bond yields and income from investments to pass on as divi . That’s evaporating!” clearly did not read the annual report and understand LGEN and where it gets its income from.

(1) The 2019 annual report is here: https://www.legalandgeneralgroup.com/media/17715/240101077_lg_ar2019_web-ready_lo-1.pdf - page 135 - L&G gets its income from: Retirement (LGR), Investment Management (LGIM), Capital (LGC) and Insurance (LGI).

(2) The 2020 H1 result is here: https://www.legalandgeneralgroup.com/media/17912/hy20-slide-template-finalcms.pdf - page 5 - LGR up, LGIM up, LGC down, LGI down. Page 6 – dividend well covered.

(3) The forecast EPS is here https://www.marketscreener.com/quote/stock/LEGAL-GENERAL-PLC-4002140/financials/

(4) The case for buying is here https://seekingalpha.com/article/4374327-legal-generals-9-yield-is-steal-covered-1_8x-eps

The 2020 forecast EPS is 26p. At the current share price of 180p this gives a P/E of 6.923. According to (3), the 2021 forecast EPS is 29p. Using the same P/E will give a share price of 200.77p. According to (1) page 3, the dividend has grown 7% every year (apart from 2020) which gives a 2021 dividend of 18.79p. So a total profit of 200.77p - 180p + 18.79p = 39.56p which is 21.97% profit from today’s share price of 180p.

According to (3), the average P/E is 10.8. According to (4), the CAGR for EPS is 11% and 13% for the dividend. If L&G can move toward these numbers in the next few years the return will be massive.

I am happy to hold for the long term.

Perhaps you are mistaking 5 years for 10 years? In my message I said 5 years. Here are the facts:

Share price on 18/08/2015 - £8.78 (source Hargreaves Lansdown)
Share price today: 18/08/2020 - £8.75

5 years annualised return : 4.73% (source MorningStar)
5 Years average RPI from 2019 to 2014: 2.6% + 3.3% + 3.6% + 1% + 2.4% = 12.3% => 2.46% per year (source statista.com)

Therefore a real yearly return of 4.73% - 2.46% = 2.27%

And a share price that didn't even grow in line with RPI and therefore down in real term.

As to the CEO, see simplywall.st, https://simplywall.st/news/is-national-grid-plc-lonng-overpaying-its-ceo/ , the CEO compensation has increased by more than 20% whilst company earnings have fallen more than 20%.

And I haven't started on the Chairman yet.

This share has gone nowhere in the last 5 years. Incompetent CEO and Chairman only there to enrich themselves and add no value whatsoever to the company.

Unfortunately, I haven't sold all my WITAN shares due to hitting the capital gain limit.

Their half year result for the first half of 2020 is extraordinarily bad. Only 4 out of 10 portfolios perform above benchmark!

Extraordinary indeed considering even monkeys throwing darts can statistically get 5 out of 10 correct.

Why bother paying a yearly non-performance fee of 0.87% to "professionals" when a low cost world tracker such as Vanguard FTSE Global All Cap Index (0.24% fee) or Fidelity Index World P (0.12% fee) easily beat them over a 1,3 and 5 years period!

When BMO took over I transferred all my shares to IWeb Share Dealing Account (operated by Halifax), which charges £25 for opening an ISA Account and throw in a Share Dealing Account for free. No yearly account charge for both accounts. Dividend reinvestment is charged at a flat rate of 2% based on the value of the dividend and capped at £5. Every year I sell some share in the IWeb Share Dealing Account and move the money to IWeb ISA and buy back the share.

Agree with HSBCynic and Turnpan. I have been holding this share for 22 years. Seem very boring but Morningstar says it give an annualised return of 12% for the last 10 years.

This is a tough one. I've been adding small chunks since the equivalent of £1.80 in today's price,
but even long term investor is allowed to make some short term trades to hopefully gain more shares. This share has jumped 20-25% in 10 days. Its history suggests it bound to have a sharp down turn. The million dollar questions are to what level the upward swing will reach before a fall and to what level the fall will reach over what period. Then again there is always the danger of "this time its different". Obviously, if I were any good at predicting I wouldn't still be here making prediction. My intention is trade 20-25% of my holding in/out and hold 75-80%. Until one day it reaches a nice level (say £20), then sell the lot and look at the Pacific ocean instead of share prices.

And the CEO himself also made that projection. Type this "Hogg Chi-Med profit 2024" into Google to get the articles.

dnalkr1k, the anwer to the question of "when the company might actually be expected to generate a profit" has been known for quite some time. I know the answer. I am sure the regular posters of this board also know the answer. Any analyst of HCM worth their soul must also know the answer. So there is no point in asking that question.

Until the company is profitable, there is no point in talking about paying dividends.

Thanks ttyn for the article. Prove commercialisation success first. Listing in Hong Kong. Raise up to US$500 million. Plus the $130m factory news and the existing drugs' timescale. There is the strategy here for the next few years. With a hopefully sensible HK IPO price to prevent too much dilution, and hopefully GA won't exercising warrant until share price is in the mid $40/ADS and CKHH hands off, this share should fly.

Great result from a great company making a great progress. But share price hardly moves! What is going on?

“Markets are never wrong, only opinions are” - Jesse Livermore

Since the markets are never wrong, let’s suppose the opinions about the great HCM are also not wrong, then HCM must be in the wrong markets.

London AIM is regarded as the Wild West, some days only a handful of trades on HCM. Not enough interest. In the US, Chinese companies these days are hardly popular with the constant China-bashing, threats of delisting, decoupling and accusation of intellectual theft. Not enough interest there either.

Trying to sell HCM in these 2 markets is like trying to sell roller skates to seniors from retirement homes; hardly anyone is interested no matter how great your roller skates are.

It only makes sense to list HCM in the HK/Shanghai markets. Chinese investors will be more interested in the many “1st ever..” , “China –only..”, “NDA submission ...” and “Global partnership...” achieved by a Chinese company.

It beggar belief that a 99.9% Chinese company hasn’t got a listing in HK/Shanghai. May be other potential investors also thinking the same?

Yep, I have been investing in WTAN for nearly 20 years but for the last 3 years it has been doing the 'zzz'. I am now selling and invest in low cost trackers.

General Atlantic's CEO mentioned in his interview video that they managed to achieve 28-29% pa growth in their portfolio. Now that the dangers of share dilution is virtually gone, bar some mishaps, a 20% or more increase in HCM's share price within the next 18 months is quite achievable. GA's option to buy again at $30 is a very clever move.

falkland, "Never Mind....". Well said! If you have achieved your objective (i.e. make 10% , 20%, 30% whatever) then well done. None of us has a crystal ball to tell the future. This share can still go down as well as up. For me £2.50 is still a buy as it pays 7% dividend and has a chance of returning to the previous high of £3.18 (it will be a 27% increase from £2.50).
You are rich when you are content and happy with what you have.

I believe the current low price, dropped from about £4.20 from Feb 2020, is caused by the coronasvirus crisis.

The share price is slowly moving upward, aided by all the good HCM news releases recently and general brighter overall market outlook.

Until the company is cash flow positive, there is always a danger that, once the price moves up to £4.50/£5.00, they will place another ADS to raise cash. Given the history of ADS placing in June 2019, I don't have much confidence.

However, once they got the cash flow sorted and the good news keep coming, the share price should fly.

I am neither buying nor selling but will hold for another 3-5 years, fingers crossed.

I suspect that the management might have agreed the price and quantity when the share price was closer to 400p, but by the time they came to execute the plan the share price had already shot up to 450p. So the market saw this as too big a discount and went into a panic sell. I would have sold it at 450p if I had the confident that I could buy it back at 400p. At the moment the bid price is around 375p but I am not buying as I am already way overweight on this stock. Best wishes to whoever is buying or selling....

Rakesh Kapoor gave himself massive pay rise for simply being lucky to be at the right place at the right time. Where is the performance in the last 12 months to justify his massive payslip?

BTW, he is one of those whose first 3 days of pay exceeded the average worker's wage.