The Lemon Fool

Good morning all,

My HYP was last posted here on 22 Sep 21 here; viewtopic.php?p=443590#p443590 since which I made three top ups, those being; Sep 21 LXI, Oct 21 HICL and HICL once more in Nov 21. There have been no sales.

My HYP now looks like this, in capital value weighting terms;

Share                                  Weight
Legal & General                         5.7%
British American Tobacco                4.6%
BAE Systems                             4.6%
GlaxoSmithKline                         4.6%
Admiral Group                           4.5%
National Grid                           4.4%
SSE                                     3.8%
IG Group                                3.8%
Tritax Big Box                          3.8%
Shell (RDSB)                            3.8%
BP.                                     3.8%
United Utilities                        3.7%
Phoenix Group                           3.6%
Vodafone                                3.4%
BHP Group                               3.4%
Tesco                                   3.4%
AstraZeneca                             3.3%
Sainsbury                               3.3%
The Renewables Infrastructure Group     3.2%
Tate & Lyle                             3.2%
Greencoat UK Wind                       3.0%
Primary Health Properties               3.0%
Schroders (non-voting)                  2.8%
LXI                                     2.8%
Rio Tinto                               2.8%
Unilever                                2.6%
HICL                                    2.6%
Diageo                                  2.2%
Average                                 3.5%

The law of ish applies.

My plan is to top up my PHP holdings this month, and UKW in Jan 22, then RIO in Feb 22. Obviously, that plan is in flux as things change. I may well top up my ULVR holdings over the coming months too.

Your comments are invited.

Ian.

I'm hoping Ulvr will take its usual spring dip and plan to add a few if and when.

Any reason for not adding UKW during the recent placing even if to add the 1 for 13 charges free.

I've not followed RIO, I wasn't sure if they might be struggling or cutting the dividend. I thought that I had indirectly gained some via Hfel but it looks like they have sold out of them for some reason hence the comments above.

Gerry557 wrote:I'm hoping Ulvr will take its usual spring dip and plan to add a few if and when.

Any reason for not adding UKW during the recent placing even if to add the 1 for 13 charges free.

I've not followed RIO, I wasn't sure if they might be struggling or cutting the dividend. I thought that I had indirectly gained some via Hfel but it looks like they have sold out of them for some reason hence the comments above.

Thanks for your input. Re the recent UKW placing, I obviously had that option but was more focussed on topping up my HICL holdings. With the latter, I now think I’ve enough of them as they’re a bit pricey now, and will happily look elsewhere going forward.

Re RIO, imho they’re just going through a bit of a down turn currently, that being the norm in that cyclical industry. I did cut my holdings back not long ago when they were riding higher in sp terms and had become very overweight in my HYP. I don’t mind buying back into them to pick up the higher yield they now offer.

As for ULVR, I think they’re a class act on offer currently, for a long term hold.

Ian.

That's a great HYP Ian.

Personally I would choose Imperial Brands over British American Tobacco as my tobacco stock, although in practice I hold both.

(I hate smoking and can barely stand the smell, which probably makes me a real hypocrite. )

All the best,

Steve

Gostevie wrote:Personally I would choose Imperial Brands over British American Tobacco as my tobacco stock,
Steve

I would be interested to understand your reasoning for this preference

TUK020 wrote:

Gostevie wrote:Personally I would choose Imperial Brands over British American Tobacco as my tobacco stock,
Steve

I would be interested to understand your reasoning for this preference

With respect to Gostevie, so am I. Imperial cut their dividend in the recent past I think, which puts me off. I’m also mindful of Dod’s oft mentioned warnings about the danger of just “chasing a high yield” or words to that effect. But each to their own.

My thanks to G for his kind comment, and I don’t smoke either.

Ian.

With BATS on 8.4% yield and IMB on 8.9% buying either would look like yield chasing to those that preclude shares on that metric. Don't some round here set a yield limit of twice the FTSE or City of London investment trust. The 100 yields about 3.5%.
For those of us who have had the baccy companies for years that very yield has been caused by small increases in my income but by eroding my capital. IMB did reduce their dividend in 2020 from 206.5p annually to 137p then to 139p the following year.

Ian looking Unilever you've noticed current yield is about as good as it gets for them.

kempiejon wrote:With BATS on 8.4% yield and IMB on 8.9% buying either would look like yield chasing to those that preclude shares on that metric. Don't some round here set a yield limit of twice the FTSE or City of London investment trust. The 100 yields about 3.5%.
For those of us who have had the baccy companies for years that very yield has been caused by small increases in my income but by eroding my capital. IMB did reduce their dividend in 2020 from 206.5p annually to 137p then to 139p the following year.

Ian looking Unilever you've noticed current yield is about as good as it gets for them.

Thanks for your input. I get what you’re saying about the shares offering similarly high yields, but I still prefer BATS tbh.

As for ULVR, I think you’re right. The yield on offer from them currently may well be as good as it gets....maybe...

Ian.

My HYP section contains BATS at 2.0% and IMB at 2.6% so that's pretty much the same as IDP's overall holding for baccy.

My thoughts (for what they're worth)

IMB is recovering from being on the back foot regarding development of it's next gen products but is now making grounds.
IMB Divi is well covered
Debt is slowly being reduced (thanks to our dividend reduction?)
The previous CEO has been replaced ( ).

Some questions

Will there be consolidation in the baccy industry and is IMB the weakest player?
Is IMB being shined up and put into shape for either a "marriage" or a takeover?
(there have been 3 players who have increased their % holdings recently - Ken Dart (up 38% to 5.2% of IMB) , Dodge & Co.(up 40% to 4.6% IMB) and FMR LLC (up 23%) to 4.3% of IMB) with Blackrock owning 7.2% of IMB as the biggest shareholder. Dart has also been adding BATS - well documented in the press.

idpickering wrote:Your comments are invited.

Unilever looks tasty and the dividend yield is at recent highs.

As does Diageo - however, it's pretty rare for the dividend yield to get high enough for consideration in a HYP so I can see why it's your smallest holding.

Best wishes


Mark.

ADrunkenMarcus wrote:
Unilever looks tasty and the dividend yield is at recent highs.

As does Diageo - however, it's pretty rare for the dividend yield to get high enough for consideration in a HYP so I can see why it's your smallest holding.

Best wishes

Mark.

Thanks for your input Mark. You’re spot on on both counts. I’ve held DGE for many years, but I’ve not been tempted to top up my holdings since due to the lower yield on offer. I’m happy to just let them be in my HYP though.

Ian.

idpickering wrote:

ADrunkenMarcus wrote:
Unilever looks tasty and the dividend yield is at recent highs.

As does Diageo - however, it's pretty rare for the dividend yield to get high enough for consideration in a HYP so I can see why it's your smallest holding.

Best wishes

Mark.

Thanks for your input Mark. You’re spot on on both counts. I’ve held DGE for many years, but I’ve not been tempted to top up my holdings since due to the lower yield on offer. I’m happy to just let them be in my HYP though.

Ian.

Yes, ULVR is definitely in the top up zone in the sense that you rarely get it at a much higher yield than it has been in the past few weeks. The only reason I haven't bought more is that the amount of cash in the account is below my nominated "safe" limit Unfortunately, I can't place more capital in my SIPP even if I wanted to due to my age.

Arb.

Thanks for your everwelcome input Arb. It seems those that have commented on ULVR seem very positive. That’s my opinion too.

I had mentioned elsewhere that I was still Pickering about maybe buying HSBC and Persimmon, but I’m holding off from doing so for now at least, maybe totally?

Maybe 28 holdings is my magic number? I don’t ‘have’ to buy even more shares I guess?

Ian.

idpickering wrote:I don’t ‘have’ to buy even more shares I guess?Ian.

No, well, I'd ignore the whole decision until the day of purchase, probably spend the intervening days looking at the wonderful scenery where I live , then do the old top-up ranking of existing shares, which for those keen spreadsheeters like me happens whenever they open their spreadsheet anyway. Then one assessment as to whether I fancy my top top-up candidate more than the top candidate on my watchlist (which highlights firms in sectors already held) and then go-for-it.

I'm on 29 shares but, like you, have doubled up on many sectors to add a tad of extra diversification. It is almost never that a new share from my watchlist asserts itself because I don't fancy "tripling-up" and the other non-represented sectors generally don't yield enough. So I seem to have asymptotically plateaued at 29 shares. I think that corporate actions are the most likely things to affect this.

C.

csearle wrote:I think that corporate actions are the most likely things to affect this.

C.

That's the way of the world. It is companies demerging that pushes the number up. Sometimes you don't want the demerged share, sometimes you build it up to a full holding. S32 was kept, Indivior was let go.

TJH

tjh290633 wrote:

csearle wrote:I think that corporate actions are the most likely things to affect this.

C.

That's the way of the world. It is companies demerging that pushes the number up. Sometimes you don't want the demerged share, sometimes you build it up to a full holding. S32 was kept, Indivior was let go.

TJH

My thanks to you both. It was enlightening reading Chris’s method, and it is much like PYAD’s I seem to recall. I really should just ‘go back to basics’ and not overthink things. I have amazing views here too up here in Orkney.

Ian.

Coming back to this thread if I may, I mentioned in my opening post that I was going to top up my Primary Health Properties holdings this month. It happened an hour ago, although it wasn't meant to happen until 22 Dec 21, but I brought the investment date forward. So, as of now, PHP make up 3.3% in capital value terms of my, still, 28 share HYP. My intention for next month, for now at least, is to add to my Greencoat UK Wind holdings. I'll decide nearer the time though.

Ian.

Can I ask what the % yield is on the overall portfolio?

MickR wrote:Can I ask what the % yield is on the overall portfolio?

About 4.8% ish.

Ian.