Member Info for TheTrotsky

Back to school for you Eccles. I was talking in absolute terms i.e. the rate has been increased by 0.25% (from 0.75%) to 1%. When was the last time you ever heard anybody talk about the relative increase in the base rate?

I really do wish people would read RNSs. The disclosure relates to a holding in Ultra Electronics held by Aviva, not the other way round!

What just happened? The share price jumped about 30p at about 3:15pm. Did MW just close their short ;-)

Let's face it. Until Lloyds has rebuilt its dividend and can show that it can generate sustainable, rising profits, the share price is unlikely to start to recover. There are green shoots but Lloyds, like many of the other banks, is still hamstrung by its past misdemeanours (there seems to be a new ambulance chaser every time you look). Sure there are economic uncertainties ahead but its the past, returning to take yet one more bite at the cherry, that really hurts.

I was somewhat taken aback by this morning's RNS; I thought she was surprisingly quiet in Tuesday's investor briefing. All the RNS says is that she has resigned, so your guess is as good as mine. I think she will definitely be a loss (been with AEW since 2014) but it's a good team and hopefully we can continue to progress from here.

A 0.25% increase in the base rate to 1% has just been announced.

It seems that somebody bought 533,219 shares in the opening auction at 450.70p (c£2.4m). Hardly chump change. Given last night's closing price it does seem strange that somebody would be willing to fork out c£2.4m in the current market unless they are betting on a near term price bump following some yet undisclosed news (either that or fat fingers). The only news that I'm aware of currently in the offing is the BofE base rate announcement although I'm not sure whether a potential 0.5% increase would warrant such a price bump. I know 16 May is just around the corner but nobody really knows what the share price will be after consolidation (higher, lower, much the same - everybody has a view but nobody really knows with any certainty). Watch this space ;-)

So, by your reckoning. AV will be trading at a discount to LGEN after consolidation. That makes a lot of sense; not.

What debt? At 31 December OXB had £109m of cash and has since raised a further £80m. So, despite the US investment of c£134m, that would still leave OXB with c£55m of cash.

Theosus, Venezuela is not a good example; the USA did everything in their power to cripple the Venezuelan economy (US democracy does not permit socialists, let alone communists, in THEIR backyard). To me it's simple. The poor spend (to live) whilst the rich save. So who do you think drives the economy? Maggie Thatcher promoted "trickle down" and look where that's got us in the last 40 years; the rich have got immeasurably richer whilst the rest of us have got a lot poorer. Personally, I'm a socio-capitalist and would look to take wealth from the rich now to be paid back to them through economic growth in the future. There are several examples of illogical "socialist" thinking that have turned capitalism on its head in the past. For instance, the introduction of paid holidays (who'd have thought that paying workers to take holidays would actually have driven economic growth AND increased the wealth of the rich at the same time). Alternatively, you could look at what Henry Ford did in the 1910s; he took a decision to increase the pay of his workers when his company was teetering on the verge of bankruptcy and, in so doing, turned his company into the most profitable car company in the world for the next 30-40 years. Giving money to the less well off isn't always a "free lunch" or as altruistic as many capitalists like to claim; it can in fact give the economy (and the general wealth of everybody) a much needed shot in the arm but it needs an outlay of wealth to get it kickstarted. I know many won't agree but the simple fact is that what we've got now only works for an increasingly smaller pool of wealthy individuals and ultimately, if we continue on this path, something will eventually break (politically, around the world, we are already lurching toward conflict and/or revolution - ultra nationalism is everywhere you care to look and the scramble for wealth is at the heart of it)

The Modern Water equipment detects Covid it doesn't prevent or cure Covid. Even if the Covid outbreak had been detected sooner there's no guarantee that the outcome for this woman would (unfortunately) have been any different and, because of the ventilation systems on cruise ships, if the woman knew beforehand that she was in an "at risk group" then she really shouldn't have been on a cruise. It can take almost a week after exposure to Covid before you test positive; so, even if all the passengers and crew tested negative before they boarded the ship, it's quite possible that one, or more, of them could have been infected when they boarded (it's even possible that the woman and husband were themselves infected before they boarded the ship).

Best laid plans and all ;-(

There doesn't seem to be any (dividend paying) safehavens from the current economic and socio-political ills. AV still seems to be, more or less, pegged at a 0.5% yield premium to LGEN's share price but a declining share price is, nevertheless, still a decline and nothing to get excited about.

AEWU has a good record of increasing the value of its properties and maximising returns. I suspect that any proceeds from the sale of Eastpoint Business Park will be reinvested to replace the rental income "lost" from the sale and generate further asset growth by identifying new investment opportunities

The expenses come out of profits before dividends but be careful with dividend yields they don't always get updated. Based on an expected dividend of 8pps for the year ending 31-Mar 2023 (same as the last four years) the share was yielding c6.22% at Friday's closing price of 128.60pps

Interestingly enough I thought much the same when I bought AV and LGEN at c349p and c264p respectively 14 months ago. Since then LGEN's share price has, for the most part, treaded water (it's briefly peaked above £3) whereas AV's share price has, for the most part, steadily improved. I've primarily bought for long term income (any capital growth being a bonus). My only rationale for selling AV would be if I thought that the share price had got too far ahead of itself. So, if LGEN was trading at c7% yield come 13 May and AV was showing indications of trading between c6% and c6.5% yield come 16 May then I'd be happy to continue to hold AV. On a like price pre and post cosolidation basis I don't think AV on a c6.6% yield is looking too expensive relative to LGEN on a c7.1% yield at the moment (based on today's closing prices).

However, in the short term, if AV's share price was to drop below c6% yield (without any corresponding reduction in LGEN's yield) then I think I might look to sell and buy back into AV after 13 May; my logic being that I think a 0.5%-1% yield disparity between AV and LGEN's yields is currently warranted by what Blanc has achieved to date but I'm doubtful that more would be warranted until Blanc can show that she is delivering on growing the top line and shrinking the overheads. In the longer term, I'm happy to continue to hold AV even if the price moves above £5 and/or yield drops to c5% if Blanc is delivering the results and/or the market re-rates dividend paying shares (if you follow Buffet's investment philosophy then now must surely be the time to buy dividend shares because virtually every article I've read recently seems to suggest we should be ditching boring dividend shares and buy exciting growth shares).

PS. I've actually plumbed to buy some more PHNX today in the hope that management's recent optimism about its future prospects begins to bear fruit. Why plumb for LGEN's c7.1% return when you can buy PHNX's c7.9% return ;-)

Hitman, Would love AV to trade above £5 but I think we have to accept that we aren't in the same situation as we were 5 yrs ago. Dividend shares are generally out of favour and yields have risen across the board. I'm not saying that's how it should be but it's difficult to buck the market. In the meantime, I'm loading my SIPP up with high yielding shares ;-)

Devon, I'm not as fixated on the higher dividend yield as you suggest. Both LGEN and PHNX plan to increase their dividends for the year ending 31-Dec 2022, by low single digit percentages, but unlike AV, haven't set out what they plan to pay; that's why in all the yield comparisons I've stuck to the dividends paid for the year ended 31-Dec 2021. I don't agree with your post consolidation sell off theory simply because that would necessitate the market valuing AV at a discount to LGEN and I don't think that would be merited. As for people buying in post announcement for the B shares, I'd expect them to sell before 13-May; as far as they are concerned, it's all capital return (rather than a mix of capital and income) and there'd be no logic to exposing themselves to any uncertainties post consolidation (people normally hang around post transaction to pick up the income dividend) or if they do hang around it would be because they'd expect the share price to rise post consolidation.

I'd also suggest that you revisit your "every other consolidation" mantra and actually compare and contrast. Take Tesco and National Grid, part of their logic was to try and keep the pre and post dividend per share the same whilst totally ignoring the fact that some, if not all, of the special dividend was factored into the share price and that post transaction. At the moment AV is trading at a c5% yield. It won't be trading at c5% yield post transaction. AV plan to maintain and increase the existing dividend pot, unlike Tesco and National Grid, and that will go part way to offsetting any "fall". That's why I'm trying to look beyond 13 May and peg AV's share price relative to LGEN. I don't think that AV will be trading at c5% yield post 13 May but nor do I think that it will be trading at c7% yield either; as I say, I think it will be somewhere in the range between c6% and c6.5% to reflect a premium to LGEN i.e. c450pps to c480pps (and if the share price hits 480pps before 13 May I will think long and hard about selling). Obviously these figures are subject to change should AV change the conversion ratio as Eurofox has highlighted.

Hitman, There could be a loss on conversion but, like everything else, nothing is certain. If you bought at the closing price today then you'd need the share price to be above c450.5pps on 16 May to be "in the money". That's not unfeasible but it's not guaranteed. I'd however agree that the 423.3pps figure will ultimately have no bearing in determining whether or not you will actually be in or out of the money.

No you don't Devon. Keeping it simple, if you bought (say) 100 shares today at (say) 444pps you wouldn't be entitled to the dividend (14.7pps) but you would be entitled to the capital return. So, on 16 May, you'd have 76 new shares plus be entitled to receive £101.69. To breakeven the new shares would have to be trading at, or above, 450.41pps on 16 May which would imply a dividend yield of c6.4% and a prospective dividend yield of c6.9% (those dividend yields don't look too farfecthed when compared to LGEN, if you agree that AV would warrant trading at a premium to LGEN). That's why people have still been buying; you are not guaranteed to lose money at "any price" above 423.3pps. You could lose money but that applies to all shareholders; all shareholders have a breakeven price whether that be above or below 423.3pps albeit some scenarios are less likely than others. Nobody knows for certain what AV's share price will be on 16 May.

From my own perspective, that's why I've been trying to look beyond 13 May and gauge what the market might consider to be a reasonable dividend yield in comparison to LGEN (in particular). LGEN may have some issues arising from the war in Ukraine but they are unlikely to be materially significant, so LGEN is not a bad belwether of current investor sentiment vis-a-vis the Ukraine conflict, inflation etc. At today's close, LGEN was trading on a dividend yield of c6.96% and I don't think it's wholly unreasonable to think that the market would price AV at a premium to LGEN (resulting in AV having a lower dividend yield) because of what Blanc has achieved in the last 18 months.

The $million question is how much; if LGEN remains at, or around, c7% dividend yield, I personally think that, come 16 May, AV will be trading somewhere in the range between 6% and 6.5% (which would equate to a share price in the range between c445pps and c480pps) but will be keeping a close eye on LGEN in the meantime. If the market becomes more bearish in the intervening period, I'd expect LGEN's share price to drop further and its yield to rise and vice versa if the market becomes more bullish; all of which could have some bearing on AV's potential share price post 13 May (I still think it will be priced at a premium at LGEN but the price range will change). That's the theory anyway ;-)

PS. Interestingly, adopting the share price before equals the share price after theory come 16 May, AV at today's close was trading at a c6.5% dividend yield (and a prospective dividend yield of c7%).

I'm a pre-Covid investor so never considered mass vaccine production as anything other than temporary (just icing on the cake). Obviously there were some (many) investors only along for the vaccine ride and I imagine yesterday's price fall has shaken a lot of them loose. Get used to the post Covid reality; the potential value in OXB is not, and never was, in whether it was manufacturing AZ's Covid vaccine. The income has been welcome but OXB has never planned to be a long-term vaccine manufacturer