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Only just seen that RNS that came out late this morning. Neil Woodford has reduced his 25% holding in PFG by selling off near 1.5% of it, now leaving him with 23.58%.

PFG was instrumental in destroying his reputation in the city. Thought he'd double-down (as they say in the states) and brazen it out - but won't be surprised if this gets picked up in then media.

Maybe I should email him my research on profit-warning-hit sghares LOL! As I think he's selling at the worst possible time.

Anyway - that could explain the accelerated downtrend in the SP over the past couple of weeks. If he's now completed his transactions, it might mean the floor of this retrace could make it's presence felt v soon. (Unless he's got a few small sells left to go).

So question is:
Was/is this latest downtrend due to the selling of a relatively small quantity of his shares, or has the market taken fright that Woodford, might be considering relinquishing further quantities of his holding in PFG staged over the coming months ? ? ?

I think that'a fair assumption - IMO anywhere between tonight's close and the 600 area is all good (for me) to buy.

The reason I think no lower is that would really be, yet another stomach churning double figure % drop from the past week or so's high, and past research of profit-warning-hit-shares suggests to me that the days of such heavy retraces should have come to an end for PFG - so if it did revisit 590's/580's it would be just par for the course, in which long term holders have had to endure and come to expect this past full year+
- And I'd be out of comparison's to the mean averages of other profit-warning shares - and I'd have to skip past PFG and regard it as a deviant to the other mean averages in the research papers.

So, I'm going to relax and have a punt - by following the trend as far as it decides to go, and not second guess it.

That means I may miss the absolute floor. But for once, instead of trying to pre-empt the trend I'm going to let it sink until it commences to the upside, once it confirms to the upside, I'll have a wee, first part-tranche, nibble.

PFG is not a natural selection for me. Have previously posted that I can't find anything worthy in the balance sheet - you'd thing after that year long+ drop from circa £30-odd to £6-odd, that the balance sheet would be showing under-valuation everywhere. But it's not the case at all, in any way, shape or form.

Get this; did you know the fwd P/E ratio is still higher than the sector average?

So in fact it's still over valued - by P/E comparisons alone. Even Morses is sporting a lower, better value P/E ratio tonight. You could argue on the other hand, therefore, that the market puts more future 'value' on PFG than Morses. But for PFG just to fit in with the average sector P/E ratio it would have to be as low as 575p/585p's area!!!

- But as I've said previously that doesn't fit in with my belief that PFG is now statistically free of profit-warning-hit territory, and should perform more, more. . . . what's that word again? Oh yes, more "safely".

Hence I'm not planning on seeing sub 600's again. There, that should ensure it does the exact opposite to what I've just posted LOL!

(Cont: Part 2)

So as a test of reasonableness, my back of a fag paper calc comes within range of acceptability, yes?
I know what you're thinking - I've used the current exchange rate for the March results payout. But even so, it hardly makes that much difference to the point I'm about to make. Before I do that let's examine the years prior to last year to get a sense of whether last year was higher or lower than previous years as a single amount -

Actual paid out in cash dividends:
2018 was 3.920b EUR
2017 was 3.714b EUR
2016 was 4.188b EUR
2015 was 3.758b EUR
2014 was 6.019b EUR (I hope your double-checking these Johan, they're in all the accounts :)
2013 was 5.900b EUR

Okay, so moving on, 3 of those years failed to produce enough earnings to cover those dividend payments in full, last year just about barely made it across the finish line at 1.05 cover, with only 2 years easily producing enough earnings to cover the dividend payments.

- But this current year AND next year are forecast to fail to meet divi payments from earnings.

Back to the current year.
So, all-in-all is it fair to say that very roughly, this year's projection of £3.5b to be paid out in dividends, lines up with what's been paid out in previous years and is no magic number plucked out of thin air? Yes?

Next question, what is the forecast net profit likely to be in order to pay for this current 8% divi?
Well this year ending 2019 forecast is to produce £2.8b net profit - yet look above and see that payments due this year in dividends is to total £3.5b - So already we have a shortfall. Where's the money to come from to pay that? Loans, or sell something off? The bank lenders will want to know how VOD are using their lending facilities.

Next year ending 2020 actually is forecast to produce better net profit at £3.2b but the divi cover is not much improved at 0.81 so it will be the same scenario again - a shortfall in meeting divi payments from earnings. What I'm suggesting is - this can not continue. There needs to be a company guidance as to which year they see dividends being met from earnings as those cumulative years start to tot up.

Now, how in god's name do you reckon: " Vodafone's dividend has never been better covered"
- That's a totally erroneous statement and needs retracting or at least correcting.

(Part 1 of 2)
----------------
johandesilva @ " Mishmosh, I am not sure I do understand you when I was writing to someone else. "

- Oh come on johan, admit you're deliberately using obfuscation to evade acknowledgement of what caused that response to you by m/mosh :)

Your post was fine until the closing sentence. All that preceded it, was your opinion of my opinions - of which you are fully entitled to air and caused no offence. But your closing sentence offends a not only m/mosh but probably anyone who read such a blatant attempt to rewrite history with you're:

" Vodafone's dividend has never been better covered".

That is so patently incorrect, that I suspect you of deliberately misdirecting - because the only alternative is to accept that you do not understand what dividend cover actually means. To avoid that - I'm going with the latter - and lay it out in £'s & pence, because you've offered no figures to support your (incorrect) assertion, I'm going to take you through it to prove to you in unmistakable terms that you are wholly mistaken. If you disagree please refrain from just saying well that's your opinion - but instead do as I'm about to do to you - and supply, numbers and facts only.

1) Dividend cover is a method for investors to quickly identify whether a company is paying dividends wholly from earnings - or using borrowings or other means to pay for dividends, should earnings be insufficient to meet that payment. I intend showing you that VOD's earnings are, and have been, off and on, for some years, insufficient to cover all dividend payments and further, that both this year and next year will also fail to generate sufficient earnings to meet those dividend payments too - should the current dividend payment policy be maintained.

First let's establish how much dividends will cost in this current year. Currently, based on the SP with a fwd divi yield of 8% and a market Cap of £43.81B then a quick back of fag paper calc shows that dividend payments will be (8.05% x the MCap) in the region of £3.5B

Do you agree? Stop there and consider for a moment, do you agree?

To help, let's see what was in last year's Cash Flow accounts and in previous years to gain a 'sense of reasonableness test' by comparison of previous amounts paid out.

First up is the year just ended March 2018 and in the Cash Flow account it shows (it's in red on mine) that last years dividend payments to investors amounted to 3.92....
- damn it's in Euros = £3.92B Euros, which roughly converts on Google to £3.5 Billion paid out last year in cash dividends.

So as a test of reasonableness, my back of a fag paper calc comes within range of acceptability, yes?
I know what you're thinking - I've ..... continues.....

Didn't intend posting again, but doing so just to add a caveat. I will respond if my name is called by any poster to answer someone's query on any figures I've supplied - otherwise I do need to cut back on my contributions in general, so am looking to slide out of here after both this post and one more after that. Let's see if I can abide by that.
---------------------

Hi Longish - and thanks for your thoughts on the infamous 'Z score' ie., with your: "I think Z score is distorted by regulation of revenues (and costs) between licensed operators".

All I can say in response is that, I (or anyone else for that matter) can only go on reported and audited, full year and interim, trading accounts, no matter where in the world the revenue and associated costs are derived from. If that's what they report as the final picture from around the world - then that's what I'm obliged to take at face value. And that's the only data used.

It's been put to me (elsewhere) that VOD is such a complicated company these days that I should refrain from viewing it as a telecoms company that offers a service and instead regard it more like a sort of "holdings.com" company. Whilst I appreciate its complexity can mislead, it doesn't help - I am honour bound to use only the audited official trading reports, and not introduce speculation and adjust, but leave speculative interpretations to arrive at 'alternative views' to more knowledgeable posters.

I (attempt) to derive an opinion based solely on the reported results and facts, not speculative maybes, and this time next year Rodders opinions - but the actual trading reports, which is exactly the case with that Z-Score report. I have no expertise in telecoms to pontificate on say for instance copper v fibre replacement, future 5G costs etc., etc., Only on reported figures. And as such can use the same methodology across the board on all shares rather than attempt and fail to become a specialist in each industry within my portfolios.

The dumbest poster on actual IT telecom matters on this board - just has to be me. I leave all that stuff to those of an engineering background, who claim to fully understand it.
---------------

Now one more post after this, and I truly am done here - unless called to give an account of my opinions as I'm just about to ask that very same thing of some else in a moment or two :)

Hi Mrd5432, Was going to ask you - what then, do you attribute this savage retrace of VOD's SP down to?

But I notice you mention a "FSTE rot" as the culprit? Yes?

Hmm, well, why aren't all my holdings in my portfolios suffering the same fate?

Still, if you believe that, and it's your belief of why the SP has been so battered down, then your answer is just as acceptable as any others I suppose.
But I'm not convinced it's soley down to the FTSE trend alone. As for calling for 3 or 4% rise as some sort of victory I think if that's all you see then you'll have a lot of unhappy posters on here feeling you are short selling them!

"And assumin you convincing everyone here 150 is coming lol"

There is that danger, but I did say at the very beginning I would make 2 or 3 posts then depart; so that is not my agenda, as I'd be on here regularily, banging on about it day after day, wouldn't I?

As for DT - yes it's common knowledge they're right p! -ssed off with VOD and still making waves behind the scenes trying to get the whole deal dropped - they're as angry as a bunch of wasps shaken in a sealed jam jar. Seeing as I agree with you on that point, what IS the point? DT are hurting over the Liberty deal - so what? What's an angry DT got to do with the price of butter?

Think I've covered your points - (it's late) so shout out if I've missed any. VOD's balance sheet is a mixture of a Curate's egg. Some excellent metrics mixed with some stinkers. Oh - You mention the divi covered by the FCF instead. Have to give some credence to that asssertion as FCF is indeed exemplary at more than 50% better than the peers in its sector group. However, liquidity as measured by 'The acid test' metric (ie., the quick ratio) is poor at 0.6 It's a generaly accepted that a healthy 'Quick ratio' metric is above 1.0 (like the divi cover) but in VOD's case it isn't. Like I said a bit like a curate's egg in places as that healthy FCF should improve liquidity, but it isn't..

'Interest Cover' on the other hand (a company's ability to meet its debt obligations) is .... exemplary at a measurement of 10.7 (Trouble starts should that metric read below 1.0).

And whilst on the positive things in VOD, so is the Price To Book Value, it's better than good - it's excellent value, as is the Price to FCF previously mentioned, and EBIDA too - but here comes the curate's egg bit. ROCE, ROE and plain old Operating Margin are all considerably worse than the sector averages.

It's a complex company and not easy to sum up with a few numbers. So apart from FTSE being down as you claim as the reason - what else do you attribute as to why the market has taken so against the SP of VOD?

- Surely to god you can't seriously believe it's all down to how the FTSE index behaves alone?

(Post 1 of 2)

This particular post is intended to give those on a losing streak with VOD some sort of handle to hang on to as a baseline/ or measure against, and not as some prediction of a future SP point - it's an OPINION only - that I hope might offer some balance to those wondering What is a fair price for VOD? Is this the floor? Might it fall further? or Is this retrace over now? Here goes:

Already posted an opinion piece elsewhere on What is a fair valuation today, so to save repeating will part copy and paste the bulk and just calculate VOD only figures and insert for speed.

I lnoticed a post here from this morning, in which the poster offered a fair price evaluation of VOD - but I disagreed with it. However, to be fair I used a variety of differing methods and found one that I happen to distrust intently but it also backed-up that poster's evaluation, so I'll post that one too - in addition to my own preference for evaluating fair price which I have found comes up trumps more often than other methods.

First that post from this morning on here that triggered me to respond:

** "...VOD is a buy, it can go lower but you gotta be stupid not to know that VOD is easily worth 200p but 240p is the fair value! " **

I've chosen a method that's done me proud most often - comparison of sector P/E's to the current actual P/E ratio (discounted/ and non-discounted cash flow methods, much preferred by the pro's, I always find, give me out and out, wild unworkable figures, much like broker's differing forecasts).

Consider: The fwd P/E ratio for VOD is bang-on P/E 16

(P.S. The P/E you see above on this site, is historic and would produce outrageous figures to the detriment of VOD, nor would it be as accurate as fwd figures).

Both the sector average and the whole stock market average P/E are well BELOW that of VOD. Suggesting that the market still puts a premium on VOD being rated as superior to all other peers in its group (and the rest of the stock market average for that matter too as the stock market as a whole has a P/E ratio of 13.3)

But for this purpose I'm only interested in how VOD compares to its peers within its own sector - and the sector average is P/E 14.5

(So if the market rates VOD above all other competitors, on average; what's with this huge retrace below 200p? Just what is the market trying to bring VOD back into line with? Is it being re-rated to be closer, but still above its peers, or the same-as and no better?)

The sector average of P/E 14.5 is 9.3%+ below VOD's current fwd P/E 16.0 ratio.

And that means for the SP just to brought in to line with the rest of it's peers in the telecoms industry, and display a P/E ratio of 14.5 would mean the SP having to retrace down to circa 149p !

- Is that what the market's up to? Bringing VOD into line with its peers? Your guess is as good as anybody's on this.

Using the .... prt 2 continues

Never posted on the VOD forum before, despite intending to be a long term holder in VOD - in and out, years apart, twice in recent past years, it's still on one of my to-buy watchlists.

- Only want to post 2 or 3 posts tonight, then I'm done here for good.

One is on posters interpretation of Barcharts, pivot points,

- another on a post below that attempts to define what is a fair valuation for VOD - to which I beg to differ with the conclusion posted,

- and maybe, maybe not, to lay the ground to coming back in a few weeks to post a complicated explanation (when I can get to the bottom of it) of what I see as v dangerous for VOD in the balance sheet, unless action is taken, which could (could, not will) be on course to bring VOD to its knees, but it's of the make-you-eyes-bleed variety just to read, and difficult to understand (difficult for me to understand) and if posters on here could pick holes in it, but it withstands that scrutiny, I might want to be brash enough to email it to the Elliott people (for their perusal/ or to be ignored, whatever) should it finally be kicked into some sort of comprehensible shape that is recognisable in the English language).

First a tongue-in-cheek word on pivot points/ support and resistance levels.

Noticed that some decent posters (not trolls etc.,) on here are quoting the resistance/support levels to THREE decimal places. Although unasked for, my advice is it maybe okay on LSE to do that, but to try and to avoid quoting to three-decimal-places-of-a-single pence, as if it's the word of god handed down to Nostradamus, as on other sites it may identify the poster - but not in a good way :)

Also it's no use hanging on to "beating" a certain price point the following day as they are obsolete every 24 hours (Will show an example below). They are "mechanical" points designed originally for day traders. True support and resistance are to the left of your screen on the actual SP price action chart for that particular share and are always the same be it days, weeks, months, or years later.

Also, Barchart (US site) don't update until gone 9pm each day as they update at the end of US markets, not ours. But, whatever, here are the pivot points before waiting until 9pm tonight. (I calculate them myself by spreadsheet - but only for fun; hence I have those prices straight after London closes, if I so choose).

1st resistance to be overcome for tomorrow is set at 166p (166.407p) For lovers of 3 decimal places :)

And first support to avoid closing below is at 162p (162.407p)

The midway pivot point itself is set at 164p (164.813p)

- All for Friday only.

---------------------------------

Back to today's closing SP.
The SP closed below that .... continues...

Quite a gap-up this morning. Impressive. (But beware gap-up's and gap-down's as they can be double edged swords in that the SP can often revisit at some future point to "fill the gap").

Someone (or some people) have moved in heavily this morning (ii's) Could see the volume was impressive, even from early trading. Firmly expect the long term volume to be bettered by tonight's close, thus suggesting it was ii's on the buying prowl.

Long term average total volume for CNA is approx 19.4m - So expecting it to close well clear and above that by close. All to the good :)

------------------------------

Thought I would drop a line, further to my previous post that CNA is undervalued and attempt to put a "fair" price on what the SP would be, were it not so undervalued but instead bog standard in line with its sector peers. In other words a mental target to aim for.

And for that I've chosen the method that's done me proud most often - comparison of sector P/E's to the current actual P/E ratio (discounted/ and not non-discounted cash flow methods, much preferred by the pro's, I always find, give me, out and out wild unworkable figures).

Consider: The fwd P/E ratio for CNA is 11.2

Both the sector average and the whole stock market average are well above that. But for this purpose I'm only interested on how undervalued CNA is to its peers within its own sector to compare - and the sector average is P/E 13.6 (Slightly higher than the stock market as a whole which is circa P/E 13. 3)

As the figures are all based on last night's close that means the sector average of P/E 13.6 is a clear 21%+ greater than CNA's fwd P/E 11.2 ratio.
And that means for the SP just to draw comparatively level with the rest of the energy industry, and display a P/E ratio of 13.6 it would mean the SP having to rise to circa 174p.

(Using the SP I see as I type it comes out at 182p, but what will that intraday SP be by tonight's close? So going with 174p).

That in no way means I expect the SP to rise to that, but rather it's a ball park figure of what I consider where fair value lies.

Below 174p and the investor is buying relatively cheaply. Buying in the 170's is fair value; not cheap, nor expensive, just "fair value
.
Of course if you use other metrics, some such as 'Earnings power' or the cash flow method etc you can end up with quite excitable figure from 200p up to mid to high 200's.

But I'm going with my own 174p as fair value. Again - that's not a forecast; just where the SP might be, if it wasn't under the cosh.

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