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New HYP Picks

For discussion of the practicalities of setting up and operating income-portfolios which follow the HYP Group Guidelines. READ Guidelines before posting
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funduffer
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Re: New HYP Picks

#443090

Postby funduffer » September 17th, 2021, 4:59 pm

tjh290633 wrote:
funduffer wrote:I wish I could steel myself to dispose of my 2 non-payers - Stagecoach (SGC) and Marstons (MARS).

I keep waiting for my target exit price, but it never seems to reach it!

Maybe give it another month, then ditch and re-invest.

FD

Stagecoach I got rid of in March 2008, when their yield fell below my cut-off point, the SP having risen to 257p and the dividend risen to 4.25p. giving a yield of 1.65%. In my view they have never since come back into contention. By 2014 the dividend was 9.5p and the SP was about 370p.

Marstons I still hold in hope. You have to have belief in the Great British Drinking Public. One does one's best.

TJH

Yes, I think Marstons has a better hope of recovery, as the pubs are now open and will probably remain so. As you say - one does one's best!

As for Stagecoach - buses now look like they may start being taken over by local authorities, and I don't think SGC do anything else much now, having dropped trains. Seems difficult to believe they will pay any dividend soon.

FD

JohnnyCyclops
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Re: New HYP Picks

#443145

Postby JohnnyCyclops » September 17th, 2021, 8:27 pm

funduffer wrote:I wish I could steel myself to dispose of my 2 non-payers - Stagecoach (SGC) and Marstons (MARS).

I keep waiting for my target exit price, but it never seems to reach it!

Maybe give it another month, then ditch and re-invest.

FD


Re SGC (or even MARS), the question in HYP really needs to be "will it get back to paying dividends"? It's also a fraction of the business it once was, having lost or given up train franchises. £4.4bn turnover in 2017 is now down to £0.9bn in 2021. Market cap has dwindled to under £0.4bn, and isn't even in the FTSE250 any more (so, the HYP rationale of 'bigger companies will self-heal' falls away.)

Clearly every investor/HYPster has their selling point. Yours is based on recouping some of the value (the 'target exit price'). For me, it's could we be doing better with the money, PLUS even if they did re-start the dividend, the fact we're 70% down on SGC purchase price means the holding is only a 1/3rd of the portfolio's median holding, so any dividend income will be reduced to a 1/3rd (other things being equal). We'd then be left with pondering adding yet more funds to turn SGC back into a substantive HYP holding. Finally, we CAN do something better - we can pool with the other three, sell them, and buy a new stock or top up existing stocks and start to generate a portfolio-level yield of 4.8%.

moorfield
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Re: New HYP Picks

#443893

Postby moorfield » September 20th, 2021, 5:14 pm

JohnnyCyclops wrote:
moorfield wrote:I'd encourage you to have another look at MONY. Things that stood out for me, and why I bought it earlier this year:

- High and consistent rates (>30%) of ROCE and CROCI (cash generation)
- Low debt/assets ratio (non-current liabilities)


I broadly liked what I saw, and without going back over every annual report for a decade, sense they don't hold a lot of cash and the dividend cover is possibly always (mostly?) thin. I also quite liked TEP - a company I'd not heard of before, but with an interesting operating model and seemingly stable leadership.

On MONY, Mrs C has used their MSE site in recent years to bag us some switched utility bills. She likes them!



Quite an impressive drop in the share price today JC, which may be a market panic/overreaction to the possibility of energy suppliers going bust.

An attractive entry point at 5.4% yield, perhaps. I may well top up un soupcon.

JohnnyCyclops
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Re: New HYP Picks

#443930

Postby JohnnyCyclops » September 20th, 2021, 8:24 pm

moorfield wrote:
JohnnyCyclops wrote:
moorfield wrote:I'd encourage you to have another look at MONY. Things that stood out for me, and why I bought it earlier this year:

- High and consistent rates (>30%) of ROCE and CROCI (cash generation)
- Low debt/assets ratio (non-current liabilities)


I broadly liked what I saw, and without going back over every annual report for a decade, sense they don't hold a lot of cash and the dividend cover is possibly always (mostly?) thin. I also quite liked TEP - a company I'd not heard of before, but with an interesting operating model and seemingly stable leadership.

On MONY, Mrs C has used their MSE site in recent years to bag us some switched utility bills. She likes them!



Quite an impressive drop in the share price today JC, which may be a market panic/overreaction to the possibility of energy suppliers going bust.

An attractive entry point at 5.4% yield, perhaps. I may well top up un soupcon.


Funny old world. We're not due to adjust the HYP until first week of Oct and the next free dealing day with II, but thank you for the nudge about MONY. I guess with fewer players in the utility market (perhaps!) there will be fewer opportunities for consumers to switch. Curiously, TEP (similar market, different offer) was up slightly on the day.

MDW1954
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Re: New HYP Picks

#443932

Postby MDW1954 » September 20th, 2021, 8:41 pm

JohnnyCyclops wrote:
moorfield wrote:
JohnnyCyclops wrote:
I broadly liked what I saw, and without going back over every annual report for a decade, sense they don't hold a lot of cash and the dividend cover is possibly always (mostly?) thin. I also quite liked TEP - a company I'd not heard of before, but with an interesting operating model and seemingly stable leadership.

On MONY, Mrs C has used their MSE site in recent years to bag us some switched utility bills. She likes them!



Quite an impressive drop in the share price today JC, which may be a market panic/overreaction to the possibility of energy suppliers going bust.

An attractive entry point at 5.4% yield, perhaps. I may well top up un soupcon.


Funny old world. We're not due to adjust the HYP until first week of Oct and the next free dealing day with II, but thank you for the nudge about MONY. I guess with fewer players in the utility market (perhaps!) there will be fewer opportunities for consumers to switch. Curiously, TEP (similar market, different offer) was up slightly on the day.


You've never really engaged with my (repeated) suggestions of looking at REITs etc, beyond saying that you owned BLND and (possibly) SGRO, and also a house.

Student accommodation, 'big box' warehouses, 'last mile' warehouses, wind farms, solar farms, doctors' surgeries, etc etc -- you don't own any of these, yet you're contemplating MONY, TEP, and similar companies with slim moats and few assets beyond their fickle customer databases?

I prefer solid assets.

MDW1954

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Re: New HYP Picks

#443981

Postby JohnnyCyclops » September 20th, 2021, 11:55 pm

MDW1954 wrote:You've never really engaged with my (repeated) suggestions of looking at REITs etc, beyond saying that you owned BLND and (possibly) SGRO, and also a house.

Student accommodation, 'big box' warehouses, 'last mile' warehouses, wind farms, solar farms, doctors' surgeries, etc etc -- you don't own any of these, yet you're contemplating MONY, TEP, and similar companies with slim moats and few assets beyond their fickle customer databases?

I prefer solid assets.

MDW1954



TL;DR - haven't had the time, may look at REITs if I need to; HYP not suffering if I don't.


For a number of reasons, in no particular order:

1. We're overweight in REITs already (both BLND & SGRO combined).

2. I've got limited time.

3. In combination #1 & #2 means I've not looked at, and not needed to look at, REITs. Same as I've not looked at the Financials industry segment either, as I focused my recent HYP time/attention on securing further diversification, looking to prune out rump stocks, top-slice and top-up plans.

4. The HYP needs to perform, not excel. By approximate value I should be spending 90% of my current time sorting out pensions and 10% on direct investments, including the HYP. I.e. the HYP is "good enough for now", given its relative standing vs overall wealth.

5. With existing direct property investment, plus the REITs held in HYP, plus potentially adding house-builders to the HYP, and one or two stocks that may also depend on property/land values, plus pension investment choices, I think we're ok for 'solid assets'.

6. I've skimmed REITs this evening. LSE lists 49, of which 18 have market caps >£1bn. Three in the FTSE100. According to DividendData.co.uk only seven are over the current FTSE100 yield of 3.57%. They may be worthy of further research (but see #2, again).

7. I tend to review dividend histories in some detail, typically back to 2000 by trawling RNS. That's time consuming; probably about 30 minutes per stock for 'non-complex' histories and more if there's been rights issues, share splits or other corporate actions. I'll look at the senior leadership, how long in tenure, what's the dividend policy, has it changed, what's the cover, where's the balance sheet at. I didn't always do this but now find it useful to understand prospective investment.

8. I may look at adding further Financial and REIT industry stocks once I've done the rebalancing, as it's possible through transactions (including halving the SGRO holding which is currently 319% median holiding value) that will free up some headroom in those industry categories.

Itsallaguess
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Re: New HYP Picks

#444011

Postby Itsallaguess » September 21st, 2021, 8:40 am

funduffer wrote:
I wish I could steel myself to dispose of my 2 non-payers - Stagecoach (SGC) and Marstons (MARS).

I keep waiting for my target exit price, but it never seems to reach it!

Maybe give it another month, then ditch and re-invest.


I'd give SGC a look today and see if that's a better exit price for you....

Cheers,

Itsallaguess

monabri
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Re: New HYP Picks

#444094

Postby monabri » September 21st, 2021, 11:34 am

Itsallaguess wrote:
funduffer wrote:
I wish I could steel myself to dispose of my 2 non-payers - Stagecoach (SGC) and Marstons (MARS).

I keep waiting for my target exit price, but it never seems to reach it!

Maybe give it another month, then ditch and re-invest.


I'd give SGC a look today and see if that's a better exit price for you....

Cheers,

Itsallaguess



That's a bit of a jump!

monabri
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Re: New HYP Picks

#444095

Postby monabri » September 21st, 2021, 11:38 am

JohnnyCyclops wrote:7. I tend to review dividend histories in some detail, typically back to 2000 by trawling RNS. That's time consuming; probably about 30 minutes per stock for 'non-complex' histories and more if there's been rights issues, share splits or other corporate actions. I'll look at the senior leadership, how long in tenure, what's the dividend policy, has it changed, what's the cover, where's the balance sheet at. I didn't always do this but now find it useful to understand prospective investment.


Try dividend data for ...dividends, yields, dividend history, share splits/ consolidation. This useful site might help save time.

https://www.dividenddata.co.uk/dividend ... et=ftse100

JohnnyCyclops
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Re: New HYP Picks

#444130

Postby JohnnyCyclops » September 21st, 2021, 1:01 pm

monabri wrote:
JohnnyCyclops wrote:7. I tend to review dividend histories in some detail, typically back to 2000 by trawling RNS. That's time consuming; probably about 30 minutes per stock for 'non-complex' histories and more if there's been rights issues, share splits or other corporate actions. I'll look at the senior leadership, how long in tenure, what's the dividend policy, has it changed, what's the cover, where's the balance sheet at. I didn't always do this but now find it useful to understand prospective investment.


Try dividend data for ...dividends, yields, dividend history, share splits/ consolidation. This useful site might help save time.

https://www.dividenddata.co.uk/dividend ... et=ftse100


Yes. I’ve used that, and thanked the person running it, and also made a couple of minor correction suggestions (also fixed Tate & Lyle’s corporate site that was displaying record dates as ex-divided dates on its history).

funduffer
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Re: New HYP Picks

#444245

Postby funduffer » September 21st, 2021, 7:12 pm

Itsallaguess wrote:
funduffer wrote:
I wish I could steel myself to dispose of my 2 non-payers - Stagecoach (SGC) and Marstons (MARS).

I keep waiting for my target exit price, but it never seems to reach it!

Maybe give it another month, then ditch and re-invest.


I'd give SGC a look today and see if that's a better exit price for you....

Cheers,

Itsallaguess

Thank you, I am on it.

Should be sold by lunchtime tomorrow!

FD


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