How to win even in bear markets. Buy quality at bargain prices. It works!

Following up my post this morning, in case it’s of any interest,  here without comment are the big dividend paying Investment Trusts I hold. Also at the end are 2 shares  not paying dividends. No comment on the Trusts as some of them get covered on the Investment Trust threads. Also these are not tips and some are well off their lows:-

Aew UK Reit (LON:AEWU) 96p 8.4% dividend.

Alternative Income REIT (LON:AIRE) 71p 8.5% dividend 

Foresight Solar Fund (LON:FSFL) 82p 9% dividend 

Henderson Far East Income (LON:HFEL) 226p 10.9% dividend 

CQS New City High Yield Fund (LON:NCYF) 52p 8.8% dividend 

Schroder European Real Estate Investment Trust (LON:SERE) 70p 7.2% dividend. 

Schroder Real Estate Investment Trust (LON:SREI) 52p 7.2% dividend.

Twentyfour Select Monthly Income Fund (LON:SMIF) 85p 8.6% dividend 

I also hold Chesnara (LON:CSN) 260p and 9.3% dividend and increased for multiple years but share price performance has been poor.

These 2 I hold are imo well worth checking out. See the Paul Scott or Graham Neary comment etc. 

De La Rue (LON:DLAR) Was 108p when Paul Scott wrote the comment below on the day of the news of the disposal authentication business. Paul was surprised at the muted share price reaction to “only” 108p. I’m even more surprised that since he wrote this the share price has fallen to 98p. It was higher ahead of the news below.

But note that timarr whose views are always worth taking in to account posted that he didn’t think much of the remaining cash printing business. I disagree based on De La Rue’s (LON:DLAR) own comments on it. Here they are:-

“Following Completion of the Transaction, the continuing operations of the Group (the "Continuing Group") will consist of the profitable Currency Division, a market leader in its field. With net cash and the ability to make further efficiency savings, the Board believes the Currency Division will continue to meet the needs of customers, providing market leading currency solutions and driving future cash generation and profitability for the Continuing Group.“

And here’s Paul Scott’s summary comment on the Authentication disposal:-

“Achieves an impressive £300m deal to dispose of its authentication division. If it completes in H1 2025, then this deal would comfortably wipe out all net debt, allow DLAR to roughly halve its pension deficit (which isn't actually that large), and still have pots of net cash left over. Maybe I've missed something important, but my initial reaction was much more positive than Mr Market's.” 

Cavendish Financial (LON:CAV) 11p. 

Cavendish is the result of CENKOS and  FINN CAP combining. They are now winning increasing new wins and could well win a lot lot more if IPOs come back in to fashion.The share is cheap and could double or more in time. 

This is really just to bring this thread back nearer the top as we’re not in a bear market now. 

Some of the big dividend paying shares are now even lower than they were in that original header article despite much perkier UK market than at the depth of the Truss chaos. Does that mean those are now even bigger bargains? 

I think so. No detail on the following now except a few snippets, but will add if asked. The really big share 10%+ yielders in my portfolio are:- 

Abrdn (LON:ABDN) £1.34 and at multi year low despite buybacks every year starting at £5! Sum of the various pasts worth a lot more than current share price. Bid possible?  14.6p annual dividend …so 11% yield. 

Amedeo Air Four Plus (LON:AA4) 48p. Dividend 8p so 16% yield. Dividend safe Management say until in to 2016. 

Liontrust Asset Management (LON:LIO) 466p. Bombed out Fund Manager. 72p dividend for 16% yield but surely a cut is coming? 

M&G (LON:MNG) 195p. 20p dividend (increases a bit each year) for 10% yield.

Phoenix group (LON:PHNX) £5. 53p and 53p dividend  and increases a bit each year for 10.6% yield.

Smiths News (LON:SNWS) 61p. VERY positive update today AND a 2p special dividend on top of the 5.4p ordinary to give near 12% yield. 

Legal & General (LON:LGEN) 220p and 21p dividend with small 2% increase each year. So just under 10% yield. 

Given the antipathy to North Sea oil hydrocarbons, you’d think that no one would be interested in SQZ. But check directors’ dealings: since April this year they have filled their boots. Do they know something about a possible plan B that we don’t?

Limited time to post this weekend. 3 really good podcasts I've listened to this last week. My brief notes below each.

https://tinyurl.com/y4vc5b5p

# Interview with Mark Slater of Slater Investments

# I always find MS very straightforward and consistent in his thinking. I have thought about buying his open ended growth fund but just never gotten round to it.

# Slater Investments runs 3 funds: 1.) income 2.) growth & 3.) recovery.

# Consistently looking for PE of 10 to 15. Back in 2010, it was 15 but now it is nearer 10.

# Growth & income have "converged".

# Public v private disconnect getting better.

# Outflows caused outflows in 2021. US tech popularity and Liz Truss mini budget didn’t help.

# More action being taken by UK boards ie: buybacks and M&A.

# Inflows now significantly better.

# Have the big funds finished selling ? Attendances at Slater Investment presentations have “rocketed” but we are waiting for a catalyst for buying in UK equities to start.

# Covid made the private sector leaner but the public sector went the other way.

# Small cap index has lost 50% of its constituents.

# Insurance companies don’t own enough of the UK (compare this with Australia).

# 1 trn of outflows versus a market with 2 trn. SSB: I'm aware of outflows from the UK equity market but I'd never heard it put in these terms before.

# Worth bearing in mind UK listed companies versus those companies that are British ie: operate in the UK.

# MS has no sectoral bias at the moment.

# Companies that MS owns are typically in niche sectors.

# Recently bought GSK (LON:GSK) because it generates cash, has a low multiple and is growing at approx 19%. Plus no one is interested (ie: it is under the radar). Similar position to AstraZeneca (LON:AZN) a few years back ? Only obvious drawback is litigation related to Zantac but MS thinks the share price is massively discounted for this.

# Biggest holding in small cap growth fund is Serco (LON:SRP) because it has a FCF yield of +8%, is steadily growing, has good ROCE, is retiring approx 7% of equity per annum and mgt is prudent. MS bought just as covid was ending (SSB: early 2022 ?) as the one-off revenues from covid put a lot of other people off owning it.

# Biggest holding in the recovery fund is Franchise Brands (LON:FRAN). Biggest business is hydraulic hoses and also owns Metrorod. Steven Hemsley is the CEO: built Pizza Express ie: understands franchise market very well.

# MS doesn’t own gold or silver miners. SSB: not sure why this was asked, just not a MS type of business.

https://tinyurl.com/2uke77yw

# ii interview with Terry Smith of Fundsmith.

# I think it was Mark Carter who posted the link on the Wed or Thu SCVR comment section.

# TS thinks now is too early to some of the tech sector as it could be a bargain in a few years when the excitement has worn off. SSB: the Polar Capital Technology Trust (LON:PCT) presentation at Mello Chiswick made exactly the same point about some of the pre-revenue tech businesses on silly ratings.

# TS is better at buying than selling. He now knows when he gets p#ssed off at mgt then it’s time to sell.

# Only sell this year has been Diageo (LON:DGE) because 1.) it was/is over stocked in Central/South America and 2.) it is maybe now starting to feel the impact of the weight loss drugs ie: reduced consumption of alcoholic drinks which contain a lot of calories ? Also change in mgt brings uncertainty plus TS already owns Brown-Forman (NYQ:BF.A) which is in the same sector.

# Bought Texas Instruments (NSQ:TXN)  because it has good capital mgt and is benefitting from onshoring.

# Also bought Atlas Copco AB (STO:ATCO A) because it has a high degree of family control. Same thinking as L'oreal SA (EPA:OR) and LVMH Moet Hennessy Louis Vuitton SE (EPA:MC)

# 59 shares on the TS watch list! 

# Owns a number of companies listed in the US that do very little business in the US.

# High quality companies listed in UK ? Relx (LON:REL) is "interesting".

# Tech sector almost non existent in UK.

# Berkshire Hathaway (NYQ:BRK.A) has never paid a dividend because Warren Buffett can re-invest the money at better rates of growth.

# Question about whether companies over prioritise dividends ? TS: yes!

# Share buybacks only make sense when a company is buying back at a price lower than intrinsic value. SSB: a much more complex subject than this one-liner suggests as intrinsic value should be the value of future cash flows which itself is difficult to calculate.

https://tinyurl.com/ywe6p799

# Interview with Alex Wright of Fidelity.

# I'm stoked he has bought Tesco (LON:TSCO), one of my biggest holdings for the last 3 years! Listen from 39 minutes. Others on this board may not be so excited, I get that :-)

# The rest of the interview is ok too. I sold Fidelity Special Values (LON:FSV) a few years back at a profit to buy Edinburgh Investment Trust (LON:EDIN).

Kenmitch, Charles - like others I very much appreciate your hard work in keeping us informed on this topic. I remember it well form Michael Walters days and did get into a number of Inv Trusts.

Of the ones in your post that I currently hold:

Abrdn (LON:ABDN), agree what a ridiculous name (I like your quote ''name chsnge'). I bought only in July at 54p, now 57p but picked up the divis, yield is 7%, big discount to NAV of 20%

Legal & General (LON:LGEN - ive been in/out at overall profit. I always preferred them to Aviva as they dont do general insurance, a long time loss leader, although of course currently motor and household insurers (and travel too) are whacking up their prices, maybe time to get in on Aviva ??(and even Direct Line after their debacle which cost the CEO her job). Thing is with LGEN that the sp has been in the doldrums for a while and today down a good 2% on what one would have thought was good news viz the sale of CALA, their ''affordable'' home builder offshoot. Perhaps the market thought it should have been more or didn't like the stretched out payment over 5 years?

<<Legal & General fell after saying it had sold UK house builder CALA Group for £1.35bn to Ferguson Bidco, an entity owned by funds managed by Sixth Street Partners and Patron Capital.>>

The insurer said it would receive cash proceeds of £1.16bn, of which £500m will be paid at closing with the remaining consideration being paid over the next five years.>>

I sold Dunelm (LON:DNLM and Serica Energy (LON:SQZ), latter may be worth looking at again, as you say the Labour Govt stance on this must now be priced in. Oil prices currently very weak, surprising really given what's going on i the Middle east and Ukraine situation.

I hold Petrotal (LON:PTAL), doen 20%, although that loss is halved from the divis received, sp down because of oil prices? This one has been/is well regarded in comment here, but it's a nervous hold for me, Any thoughts on this?

I currently have (only) about 5% of my portfolio in cash. Wondering what to do if anything in view Ukraine, Middle East and US elections, never mind all other worries that the market has to contend with. I know the past shows that wars, economic crises, and other  worries are overcome - in time - but I'm of an age what i'd like to see a return in the next say 5 years, not 10 or 20! Wait till the US elections? Or jump on a real bargain now?

dartagnan

Fantastic and interesting post. My personal concerns with Chesnara (LON:CSN) is that the 9% dividend is not well covered by earnings (cash payout ratio around 95%) or FCF, as well as the profit margin has lowered year on year. 

Hi Ken, All,

I have a handful of these high dividend payers, plus:

Legal & General (LON:LGEN) Phoenix group (LON:PHNX) M&G (LON:MNG) Abrdn (LON:ABDN) which were given by virtue of having an Endowment mortgage with Standard Life, who they acquired. Petrotal (LON:PTAL) Serica Energy (LON:SQZ) Smiths News (LON:SNWS) Taylor Wimpey (LON:TW.)Osb (LON:OSB) Diversified Energy (LON:DEC) .

Not all of these were bought at the bottom of a bear market. But some were and the rest were bought for the large dividends, generally before the market for small caps picked up.  I'm hoping that most if not all will grow over time whilst also paying large dividends that can be compounded or used to buy other companies. 

We also all know that £1000 invested in a company that yields a 9% dividend that is compounded will pay back over £1300 in ten years. If the SP grows, which it should, then that's a bonus to be added to the total. OK it's not as sexy as a small cap multi bagging but it's not far off and a lot safer! I'm also hoping that should the market suffer in any big way, and if I can't get out of these positions quickly enough, at least they won't (all) go under.

Graham.

Nothing to add here really other than to say what a fantastic topic this has been for a relatively novice income investor. Thank you Ken and anyone else that has contributed.

Mainly to bring this thread near to the top of the so many threads that get lost, here’s an update on the shares I covered in a post on Mike Walters site in 2022 at the time of the Truss chaos, and which I’ve subsequently updated and added to here, occasionally. 

That 2022 post was timed to match my preferred tactic (used by Warren Buffett) to buy quality on the big dips when most commentators and posters are saying stay away. 

Has that tactic worked? It’s mixed with big winners and the inevitable couple at least of losers where the loss needed to be taken. But the biggest disappointment is the continuing very dull performance from the very big dividend paying shares, including some in the FTSE 100. And that dull performance is despite most of them continuing to increase their already very big dividends! That’s unlikely to change short term. It needs the big Pension Funds who have shunned the UK for so long to start snapping them up. Will there be any incentive in the Budget to encourage that? 

Here are those 6 big dividend payers. 

1. Chesnara (LON:CSN) . They’ve just increased the dividend AGAIN. Interim up from 8.36p to 8.61p. Goes ex this dividend on Thursday. But share is down since that 2022 post from 279p to 262p. Dividend yield now 9%. 

2. M&G (LON:MNG) Also a (tiny) dividend increase. Ex div was last week. Share is up 20% from 2022 172p to 207p. Dividend now 10%. 

3. Phoenix group (LON:PHNX) Results were yesterday and met with a 30p share price fall not helped by their failure to sell Sun Life.  And share is flat since that post. Interim is unchanged but final likely to see another small increase. Goes ex the 26.65p dividend on Oct4th. Dividend is a bit over 10%. 

4. Legal & General (LON:LGEN) Again share has gone nowhere. Annual dividend increase target they’ve reduced from mid single figures % to 2%. Dividend now 9%. 

5. Aviva (LON:AV.) Share up over 20% from 407p to 491p and dividends increased too. But thanks to hat share price gain it means dividend yield down to around 7%. 

6. Abrdn (LON:ABDN) Also unchanged since that 2022 post. This Company went from bad to worse including the idiotic name chsnge and over paying for ii. BUT it looks well and truly priced in now with improvement under new Management not yet. Bid target? Dividend held and it’s a 9.5% yield 

THE REST:-

B&M European Value Retail SA (LON:BME) was 326p and now up over 30% to 431p. I sold after a disappointing vague Outlook statement at 560p on my tactic of always sell on bad news or hints that there might be, like a too vague Outlook statement or its disappearance altogether. 

Marks and Spencer (LON:MKS) was just 102p. ,Now 366p and given a further boost yesterday by 2 broker upgrades. Why buy now and not then when (again a tactic I use) buy quality Companies that have hit hard times on clear signs the worst was over. And that was getting very clear with Marks.   Now on the way to quadrupling? But the easy gains have been had. 

Polar Capital Holdings (LON:POLR) It’s up30% from 412p to 510p. As with other Fund Managers key thing is biy the dips in bear markets in time for the next gsins in bull markets and take profits after that good run. 

Reach (LON:RCH) Up 25% from 78p to 202p. Digital progress now? 

Sylvania Platinum (LON:SLP) Has almost halved! Clearly a bad mistake buying it and I cut the loss a good while ago. 

Volex (LON:VLX) Up 30% from 252p to 331p. 

Vertu Motors (LON:VTU) Up 50% from 43p to 66p. But I sold as it looked as though the bid confidently forecast might not happen. 

Dunelm (LON:DNLM) Up over 50% from 783p to 1228p. But I sold at just 1080p after an update and on worrying about China rival hitting them as I had learned the hard way with a big loss eventually taken on Boohoo (LON:BOO) . 

Finally Henderson Far East Income (LON:HFEL) is down 20% and dividend now 10%. 

I still hold all of these except where I’ve posted otherwise. 

Comments and thoughts very welcome! 

POSTSCRIPT. 

It’s not really worth reading it now I’ve updated on them all but below this is a paste of part of that post I did in 2022 with the shares and Trusts now in blue. The original post is in the header article. 

Abrdn (LON:ABDN)  . 142p at time of that post) Low 137p. Year to date DOWN 43%. Dividend 10.5%

Aviva (LON:AV.)  407p (at time of that post) Low 378p YTD DOWN 29%. Dividend 7.5%

B&M European Value Retail SA (LON:BME)  (Then 326p) Low 306p. YTD DOWN 48%. Dividend 5%.Discounter ideal in my opinion for hard times. Note the big share price rise for Greggs today after their update!

Chesnara (LON:CSN) (Then 279p) Low 256p YTD DOWN only 3%. Dividend 8.5% …it’s been increased every year for years! (Most of the share price lows were very recently but CSN year low was last March).

City of London Investment Trust (LON:CTY)  (then 388p) . LOW 372p. DOWN only 4% this year. Dividend 5%… increased for 57 years in a row!

Henderson Far East Income (LON:HFEL)  (then 265p. LOW 262p.I.e NOW. DOWN 10% YTD. Dividend 9.5%. It’s been increased every year for years!

Legal & General (LON:LGEN)  then 234p. LOW 212p. DOWN 24% ytd. Dividend 8%. Very encouraging update today.

M&G (LON:MNG)  Then 172p LOW 160p. DOWN 18% ytd. Dividend 10.5%. TEMPUS said BUY today.

Marks and Spencer (LON:MKS)  then 102p!!!a LOW £1. I.e now. DOWN 58% ytd! And all the way back to covid low….ahead of the share tripling and then losing the lot again! Marks is not imo a basket case.

Polar Capital Holdings (LON:POLR)  then 412p LOW 408p. DOWN 47% ytd. Dividend 11%. Fund Managers like Polar and M&G do terribly in bear markets and often soar in bull markets.

Reach (LON:RCH)  then 78p. LOW 67p. DOWN 72% ytd! Dividend if held 9%. The pension deficit was a big drag but higher interest rates have changed that and nor sure investors have cottoned on to that. . LOW 77p. UP 2% ytd. Dividend 9%

Volex (LON:VLX)  then 252p . LOW 225p. DOWN 25% ytd DESPITE excellent updates. Lots of upside.

Vertu Motors (LON:VTU) then 43p DOWN 41% ytd. Dividend 4%. That year to date fall is astonishing bearing in mind the exceptionally strong balance sheet and asset backing. Their results are tomorrow. Said to be, as is LOOKERS which I also hold, a sitting duck for a bid.

Dunelm (LON:DNLM)  then 783pLOW 670p. DOWN 43% ytd. Dividend 5%. Their shops are still very busy. Read their last update! Quality retailer.

Graham. 

I agree that Abrdn (LON:ABDN) looks well worth considering. I sold as the share price fell away from £5 and then bought back  a good while ago on that first dip to £1.45 and have held ever since.

It’s been terribly managed and hence the share price fall from £5 over 5 years ago to just £1.50 now. E.g Countless £millions wasted on buybacks starting those at £5! e.g paying a ridiculous £1.5 billion for ii. Hargreaves Lansdown (LON:HL.) has agreed to a bid at  a much lower multiple. 

BUT the key thing is that after that 70% share price fall the bad news looks priced in. Recovery with new Manager isn’t. Nor is a potential bid. And the sum of the parts looks a good way above the current market cap of £2.7billion.

Whenever the share has hit the 140s it has bottomed, no doubt helped by the 10% dividend at that price. You’re right about the dividend dates. Here’s the link for an excellent site for accurate dividend information including the latest Abrdn (LON:ABDN) dividend, where as you can see it goes ex dividend next Thursday and pay day is Sept 24th. And note that  this dividend data site also shows the yield for each new dividend too and that 7.3p dividend alone is almost 5%. 

https://www.dividenddata.co.uk...

I still hold a lot of the 25 shares and Trusts I covered last November. Looking only at those that have disappointed so far with no change in share price between then and now, along with Serica Energy (LON:SQZ) which is down 40%, the following still looking stunning bargains imo:-

Serica Energy (LON:SQZ). If they spend available cash on a sensibly priced non UK acquisition,  that might transform the share price as it did for Harbour Energy (LON:HBR) which I also hold. While waiting there’s that huge 17.6% dividend yield and outside chance of a bid. And bad news looks fully priced in. 

Legal & General (LON:LGEN) It’s staggering that a FTSE100 share paying a near 10%  dividend with 5% increase ahead and then 2% annually after that, is languishing at such a  bombed out price. 

M&G (LON:MNG) Same as Legal & General (LON:LGEN) . Share inexplicably going nowhere for so long despite what looks a safe 10% dividend yield. 

BlackRock World Mining Trust (LON:BRWM) has fallen back in recent weeks and now looks a good time to buy. Decent6% yield and when the green energy fuelled big Mining bull market eventually gets going £5.27 should look a good entry price. AND the dividend will be much higher when Mining sector shares thrive again and increase their dividends again. 

Finally. There are growing signs now that the Commercial Property sector has bottomed. Several of the Investment trust REITs look well worth checking out. And sector consolidation is happening too. The excellent Investment trust threads started by and run by Charles Mitchell are worth a visit if anyone reading this isn’t already aware of them. Here’s the link for the latest August Investment Trust thread here:-

https://www.stockopedia.com/co...

This is following up Rob’s post and the original header article. The first part of the header article was a paste of a post I did on Mike Walters site with classic buy the big dip buy suggestions. Obviously most of those picked at the time of the Liz Truss chaos and resultant big share price falls, are up a lot now and with Marks and Spencer (LON:MKS) the star performer,  as it has now tripled. 

More useful now is to look at the second part of that header article  to see how the 25 shares and Investment Trusts posted about last November, that looked well worth holding,  have done. 14 are up between 10% and 40% excluding dividends. The biggest winners arePersimmon (LON:PSN)  up 40% and up after a good update today. It pays to buy housebuilders on the big dips when fears (usually overblown) hammer their share prices.  Reach (LON:RCH) is up 35% from oversold price, Tritax EuroBox (LON:EBOX) is up 35% thanks to bid situation, Secure Trust Bank (LON:STB) is    up 32%, VietNam Holding (LON:VNH) up 20% and Volex (LON:VLX) up 20%. 

 Several of those 25 are flat but the good thing is that there are only 2 significant losers, Good Energy (LON:GOOD) down 12% from 290 to 255p and Serica Energy (LON:SQZ) down 40% from 218p to 126p. I sold Good Energy (LON:GOOD) as it looked over hyped but still hold Serica Energy (LON:SQZ). The share price has been hammered thanks to the idiotic no more new North Sea oil projects along with punitive taxes on oil shares which our politicians think is a good thing to do in their rush to go green, . Serica have complained bitterly about this ….so far falling on deaf ears.  But the key thing is that Serica Energy (LON:SQZ) can and will develop projects elsewhere if there’s no upturn. AND the PE ratio is just 3 and dividend, which could well be held, is  now 17.6%! 

If there’s any follow up to his post I’ll post another time on the flat performing shares and Trusts among those 25 as some look very good buys and often with big yields too while waiting for the share price gains. 

Really useful to compare the current prices vs this post.  POLR looks interesting again and  BWRM looks increasingly attractive, HFEL  at similar prices to then and @M&G even cheaper.  I noted your comments about a cash position but regrettably am not that prudent and will be waiting out on a potential PTAL quarterly bounce and/ or VCAP tender resolution to rebalance.  Taking your wisdom to buy on the lows...I think this is likely to be the opportunity, but if not and China and or USA keep dropping this could get sticky.  Good luck to all and especially to you Ken - I hope your picks bounce back stronger than ever.  

Tim Levene (trust manager at Augmentum Fintech (LON:AUGM)) talked about this podcast being one of the best he had ever listened to when he was interviewed on a recent Money Makers episode. 3 hours long but I listened to the whole thing over a number of days as I was a little intrigued and do a lot of walking anyway (home to train station etc). My basic notes below.

https://www.acquired.fm/episodes/renaissance-technologies 

# Renaissance Technologies (RenTech) is a hedge fund founded by Jim Simons.

# It is the best performing investment firm ever.

# 66% APR over it's 30 year history.

# Very secretive organisation.

# Medallion fund doesn’t take external money any more.

# "The man who solved the market" by Gregory Zuckerman is a good read.

# Simons started by hiring government employees who were primarily code breakers to understand if maths could be applied to the stock market.

# Led to a paper being published: "Probabilistic models for and prediction of stock market behaviour".

# Focus was on looking at trading behaviour rather than intrinsic value.

# Markov Model developed to understand random sets of data.

# But it was difficult to raise money in the mid-1960s and so Simons returned to academia. Note Buffett also had difficulties raising money for Berkshire Hathaway.

# Simons left academia in 1978 left to trade full time.

# He started RenTech with $4m starting capital from sale the of a flooring company he started with a close friend.# RenTech was originally a Venture Capital Fund but that piece was sold off and the focus for some time was FX trading.

# Then the focus changed to understand whether a single maths model could be applied to all assets classes.

# 2000: 128% gross 98% after fees. 

# Took some large losses when the tech bubble burst in early 2000 but Jim Simons told his team they were better equipped for having gone through that experience: they were more valuable to the firm.

# Sharp ratio is important, it measures a fund’s performance relative to the risk free rate.

# The Medallion Fund encouraged existing investors to leave by offering to buy them out. In 2003 RenTech kicked existing investors out! The fund is now effectively closed to outsiders.

# Volatile periods is when medallion has done best: 136% gross return in 2007 and 152% gross return in 2008.

# High level conclusion is that RenTech has run very robust models (and not deviated from them) and benefitted from trades versus emotional investors on the other side ie: people panicking on the downside.

# 1998 to 2022, total net return is 60% gross, 40% after fees.

# Original founder retired and RenTech now has 2 co-managers who oddly have completely different political allegiances: one Democrat and one Republican.

# RenTech has a significantly smaller team similar hedge funds and avoids internal competition ie: people work with and not against each other.

# Strangely RenTech still charges for fees even though the employees and past employees are the shareholders.

# RenTech employees 401K is the medallion fund (SSB: this is dangerous as Long Term Capital Management and Bear Sterns proved when they blew up).

# RenTech charges a 5% annual fee + 44% performance fees.

# Used leverage heavily in 2002 just before a new bull market took off.

# Jim Simmonds paid USD 600m+ in back taxes.

# RenTech computer models contain 10m lines of code (SSB: is this a lot ? I have no idea!).

# The podcast does not make clear what the "secret" is. Just that RenTech has been hugely successful.

# RenTech were almost certainly early adopters of AI.

# What is clear is that RenTech processes signals in the market and signals in individual share prices. They are not long term investors.

# RenTech modern investment ideas don’t come from people, they almost certainly come from data processing. As a result, the costs of infrastructure and data and risk controls are significant.

# Are they High Frequency Traders ? Apparently not.

# But Rentech does process up to 300K trades per day.

# The 2012 Knight Capital blow up shows how this type of operation can go wrong ie: if you allow the machines to completely take over and they are not programmed correctly, they can execute bad trade on bad trade.

This was a 3 hour podcast that I listened to whilst walking to and from the station/office. I'm not sure I agree with Tim Levene that it's one of the best podcasts I've listened to. Frankly, it could have been 30 minutes long and not 3 hours! What do I conclude from this: RenTech are successful but secretive as the web site proves.

https://tinyurl.com/2wkf2kfd

And for my own investing, can I take anything out of this podcast ? It's limited but....

# Do more of what I am good at and less of what I'm not good at.

# Pay up for good market data.

# Focus on quality.

# Don't panic in a market sell-off.... easier said than done.

SSB

Free weekly email from Stephen Clapham. this week is good as he discusses the Berkshire Hathaway AGM. An easy read for a Sunday afternoon.

fwiw, I always like listening to podcast interviews with Guy Spier because he thinks about buying quality at low prices and hardly ever turns over his portfolio.

https://tinyurl.com/ss3d2rv3

Really enjoyable podcast interview with private investor, John Rosier. I much prefer to listen to this as opposed to interviews with fund or trust managers as it's more relevant to me. I have briefly chatted with John at Mello and I've got to say he's a really nice fella, very amicable.

https://tinyurl.com/mta8sazv

# My notes don't do the interview justice but I will share them anyway: 

# JR says he put too much faith in commodities in 2023. China re-opening just didn’t happen.

# JR portfolio down 5.1% in 2023 but up 12% per annum since January 2012. SSB: pretty impressive long-term performance.

# Nick Train recently said maybe a “mega bid” will kick start the UK market ? SSB: Is that mega bid BHP (LON:BHP) for Anglo American (LON:AAL) ?

# Could Unilever (LON:ULVR) potential bid target ?

# FTSE 250 contains some great companies. Schroder Mid Cap stat on FTSE v S&P is interesting. SSB: I recall Jean Roche of Schroders saying something similar at the AIC Conference Q4 last year.

# JR bought Nippon Active Value Fund (LON:NAVF) and Polar Capital Technology Trust (LON:PCT) at the expense of resource rather than UK holdings into the IC Funds portfolio.

# Small and mid trusts globally are currently on good discounts.

# JR kept BlackRock World Mining Trust (LON:BRWM) in his own portfolio. SSB: I also own the trust and like it a lot but some of the BlackRock communications are not brilliant.

# JR is looking to put stocks into his own portfolio that he can be comfortable with & potentially go away for 10 years and not touch it. SSB: I really like this thinking. As a PI, if I choose well and buy at a good price, I don't need to do anything other than monitor what I hold and potential alternatives rather than churning my portfolio and incurring broker fees.

# New JR holdings: Jet2 (LON:JET2), 4imprint (LON:FOUR) (Terry Smith approach to buying shares on higher PEs on the basis that will be cheap in a few years if earnings are growing), Greggs (LON:GRG) (phenomenal sales growth from existing stores), Wilmington (LON:WIL), Gamma Communications (LON:GAMA), hVIVO (LON:HVO).

# JR now has 30 positions, up from 20. Looks to scale into positions.

# Nick Sleep gets a mention (SSB: featured in the William Green book "Richer, Wiser, Happier".... very enjoyable read!). His fund returned 21% APR from 2001 to 2015. Part of that success was based on buying companies that benefit from economies of scale that they then share with customers; this breeds loyalty.

# JR mentions that Warren Buffett made 90% of his money after the age of 60 which equates to 7.8% per annum.

SSB

I know not many hold (or even like) Tesco (LON:TSCO) but the results on Wednesday were good. I know the ROCE and margin numbers are on the low side but Tesco (LON:TSCO) keep making steady improvements to their operations, net debt is coming down and they are holding their market share against the discounters. Was disappointed by the SP movements on Wed/Thu but I will continue to hold and hope for a special dividend again maybe at some point. The share buyback programme continues.... yawn.

https://tinyurl.com/443967bd

Edinburgh Investment Trust (LON:EDIN) has finally gotten back to pre-Covid levels. James DeUpaugh is handing over the mgt of this trust to Imran Sattar. Again, a large position for me. I was thinking of switching to City of London Investment Trust (LON:CTY) but I think I will stay put, the Edinburgh Investment Trust (LON:EDIN) holdings are higher quality I think. 

The Aviva (LON:AV.)  SP came off much more than the dividend (31 pence versus 22 pence) but Amanda Blanc is doing a great job. I'm happy to hold.

XPS Pensions (LON:XPS) issued a decent trading statement on Thursday. Hope Graham updates at some point. I don't hold but I like the look of this business and I recall a John Lee presentation where I think he said he did hold.

M&G (LON:MNG) continues to drift down. It went ex div on 28^th March with the 13.2 pence dividend being paid on 9^th May. The SP was 220 pence on 28^th March and is now down to 200 pence. The Sep/Nov interim dividend is half the amount of the dividend just gone. I don't hold but I am tempted to pick some up now. Watching for the moment. Any strong views ?either way ?

Cockney Rebel's weekend post is always a good read. He shares Paul Scott's views on Warpaint London (LON:W7L) being undervalued. Ken, I saw your post on the SCVR regarding THG (LON:THG) and this also gets mentioned in CR's weekend update.

https://tinyurl.com/3mu6yf7u

I also get John Kingham's dividend emails and hold a few of the enclosed either as individual shares or included in investments trusts. Worth a scan at the very least.

https://tinyurl.com/4uxy97zp

SSB

Short BARG post....

M&G (LON:MNG) ex-dividend date was 28^th March. SP has come off from 220 pence to 208 pence for a 13 pence payout on 9^th May. Seems there was a little froth just prior to the ex-div date with the SP almost getting to 240 pence. I didn't buy M&G (LON:MNG) after my post a few weeks back but could be tempted now even though I wouldn't be eligible for the large Q1 payout (approx two-thirds of the annual dividend payout). The last time I heard John Lee speak about M&G (LON:MNG) in his monthly podcast with the IC, he said he still thinks it's a possible takeover target. This would be a shame in my view as it appears to be a quality operation and shareholders would just have to find an alternative investment (a little like when Ediston Properties got taken out last year at a very small increase to the prevailing SP).

The departing CEO and a number of others are selling shares at Record (LON:REC). I think it is this plus maybe some uncertainty around the new CEO that has seen the SP drop-off. But the trading update in late March was good and the dividend is covered. Plus the metrics are good (margin and ROCE). Stockopedia gives Record (LON:REC) 99 for quality. The share goes ex-div in early July.

https://tinyurl.com/3cmcxuss

I like the john Kingham updates. Similar to Cockney Rebel, they are free and always interesting points made.

https://tinyurl.com/4jhpj2d9

And we are coming into dividend season where hopefully SPs regain their ex-div downward movements whilst BlackRock World Mining Trust (LON:BRWM), Legal & General (LON:LGEN), Aviva (LON:AV.), Primary Health Properties (LON:PHP), Schroder Real Estate Investment Trust (LON:SREI), Schroder Oriental Income Fund (LON:SOI) and Lloyds Banking (LON:LLPC) provide healthy payouts.

Only problem is my portfolio is definitely skewed to financial stocks, commodities (BlackRock World Mining Trust (LON:BRWM)) with some variety provided by Tesco (LON:TSCO) and global investment trusts.

SSB

Not sure where to post the following so I will go for Ken's BARG thread. Enjoyed reading Cockney Rebel's Easter weekend post. There are now a number of quality free pieces of material that hit my inbox, I would probably cancel my IC subscription if it wasn't for John Rosier, Jon Baron and BearBull which I all enjoy reading.

https://tinyurl.com/4v88cwen

The piece that stood out for me was as follows:

I was looking at various Twitter posts recently, where people have complained about their performance of late. We all invest differently and have to invest how best we feel comfortable and what gives us the best results. I’m pretty happy with the return I get. I expect to beat the FTSE250 and the Small Cap Index by double what these indexes rise at, at least over the year. I also expect to lose less than half the rate they lose at over a year, in poor years. Sometimes I’ll do a lot better than that, but I have never done worse than that, annually, since turning pro. Anyone doing this professionally should be beating the indexes by some way in my opinion, after all, you should know what you are doing if you do it for a living, you should have eliminated all the likely dross and you should be avoiding the sectors that have the least best outlooks. That on its own should mean you beat the index average.

I've got a well paid full time job so limited to spend on investing. As a result, I am largely happy with large caps for dividends and investment trusts for bargains. But the above does make 100% sense. Thought is was worth sharing.

SSB

Good to see you posting here and on the Investment Trust thread too, Brucie. 

Not sure the following is much use because no longer are some of the following 6 obvious extreme  bargains after useful gains for 4 of them where the obvious bargain buy opportunity has now passed. But it might not be too late if at last shares like AVIVA and Phoenix are going to re-rate to more sensible levels.

AND even now the very big dividend yields are at levels where in normal times those yields would be a warning that the current dividend is unsustainable. Yet far from seeing cuts all 6 have either held the dividend or increased it even more!! And yields from 8% to 10% are good annualised returns even with flat share prices! 

Anyway……to what I call my “big 6” because they are big Companies paying, even after some recent share price gains, still extraordinarily big dividends. AND all 6 have now issued their Results and dividend updates.  I hold all 6. 

Legal & General (LON:LGEN) 256p. I’m UP 63% EXCLUDING the big dividends, The dividend has been increased as promised and the final is 14.63p (about 5.75%) Yield now is about 8%. Goes ex the 14.63p dividend on April 25th and pay day is 6 June. “D Day.” 

Aviva (LON:AV.)  496p. I’m UP 37% (again excluding dividends) with most of that gain recent. Again final dividend increased from 20.7p to 22.5p so about 4.5% for that dividend. Goes ex dividend on 11th April and pay day 23rd May. 

M&G (LON:MNG)  220p. I’m UP 28% excluding dividends. New buyers have missed the almost unchanged 13.2% dividend (nearly 6%) as it went ex dividend yesterday and pay day 9th May. Annual yield is 9%. 

Phoenix group (LON:PHNX) 553p. I’m DOWN 2% (excluding dividends) even after the recent share price gains. Can’t fathom why the share price was weak ahead of results considering their VERY bullish Trading update at the beginning of February.

Here’s that trading update:-

https://www.stockopedia.com/sh...

 Phoenix group (LON:PHNX) increased the dividend again. Goes ex that 26.65p final dividend on 11th April and pay day 22nd May. Full year dividend is 53p to give an annual yield of 9.5%. 

Chesnara (LON:CSN) 263p. I’m DOWN 9% excluding dividends and share has done nothing for ages so is still worth checking out in case investors wake up…….or a bidder wakes them up too late. They issued Results yesterday. Dividend up AGAIN for 19th year in a row. Final is 15.61p and a tad under 6%. Annual yield 9.5%. 

Abrdn (LON:ABDN) 141p. I’m DOWN 15% and the huge 70%+ share price fall from £5 is thoroughly deserved with some of the reasons why it is covered by other posters here. Dividend maintained and has already gone ex 7.3p dividend with pay day April 30th. 

Other posters disagree about Abrdn (LON:ABDN) looking WELL worth buying, even if only with a half stake, at this bombed out share price. Diabolically incompetent Managements can get replaced. Bidders might see that their range of businesses might well be worth a lot more than the current share price. AND the last time Abrdn (LON:ABDN) fell to current level it bounced strongly on dashed recovery hopes. That too could happen again. 

Note too the money wasted by Abrdn (LON:ABDN) on buybacks even when the share price was in free fall. They’ve spent about £3 billion on buybacks over the last 5 years ….while share price falls were relentless. But isn’t it all priced in? 

Great thread and nice to see some of the old MW gang back together - thanks to to Ken.  I've been using Stocko for some years now and really couldn't manage without it.  Is this now effectively a discussion board, or a thread in response to Ken's post about buying quality?

I couldn't agree more with the basic tenets and hold most of the shares  mentioned, one way or another.  The older I get, the more relevant income becomes!

However,  I continue to think that ultimately what one wants is a sort of 'system',  not unlike Ed Croft's NAPS folio that takes away risk of inevitable cognitive errors, including the PI's worst enemy - FOMO!  

Also, so many shares to choose  from - one should surely have  model of how many; and with what weighting.  But maybe there are no wrong answers!  I currently have about 35 in the Bruciefolio.  Paul Scott holds far fewer and gets great returns.

B5.

Reading some of the comments about Mike brought back memories: he once removed my posts for telling the truth ! He recommended a small cap which. largely based on his recommendation, took off spectacularly. When it began to reverse equally quickly, yet he was still recommending it despite his mantra of cutting losses, I asked him why. It was quite clear that the reason was that if he called it a sell, and his disciples sold, it would probably be the end of the company, with which he had, by then, established a close relationship.. When I pressed him, he sent me an email saying I was being disruptive. The company eventually died but he then, I gather, did something with another company set up by the same management ! I never trusted him again !

I also see Abrdn (LON:ABDN) is the third most shorted FTSE share by funds, at 6.4%.

5 of the 6 big dividend paying Companies I’ve regularly posted about here and previously on Mike Walters bb, have now issued their Results. It’s been overall very good news including increases in the already very big dividends for some, and none of them cutting their dividends. 

Aviva (LON:AV.) 494p. UP 10% over 1 month. Dividend increased as expected but yield down to 7% at current price. Share fell to 375p buy opportunity last Autumn. 

M&G (LON:MNG) 236p. UP 4% over 1 month. Dividend yield down to 8.5% now the share is UP 20% since the 166p buy opportunity last October. 

Legal & General (LON:LGEN) 256p. UP6% over 1 month. Dividend yield about 8%. That yield was nearly 10% at October 2023 dip 207p buy opportunity. 

Phoenix group (LON:PHNX) 539p. UP 50p today on well received Results AND increase on already big dividend! Share price prior to Results had suggested they wouldn’t be as good and hence the big gain today.  Share is up 7.6% over 1 month  but all that and more is today’s gain. Dividend is 53p so STILL a whopping 10% even after the share price gain today. To think Phoenix group (LON:PHNX) coukd be bought for just 446p last October! Dividend now, if anyone reading this did buy then, is 12.5%! 

Chesnara (LON:CSN) 260p. Due to report soon. VERY disappointing share price performance and current dismal price is a long term low(bottomed at 251p on Tuesday). They’ve increased the dividend for multiple years and yield at current price is 9%. Hoping, as with the others that their Results give the share a long overdue lift. 

Abrdn (LON:ABDN) 147p, DOWN 10% over 1 month AND now almost back to 133p multi year low. Abrdn (LON:ABDN) is different to all the others. They are well managed Companies trading at bargain prices. Abrdn (LON:ABDN) in contrast  has been a terrible Investment and very badly Managed ever since the tie up with Standard Life with the huge share price fall deserved. They’ve been buying back their shares for years and all the way down from £5, They  probably overpaid for ii. 

BUT Abrdn (LON:ABDN) might now have the most upside of all these.Why? Because apparently hidden away are businesses that if sold off would be worth way more than the current share price. And bad Management can be replaced AND a bidder could be tempted too. They’ve maintained the dividend to give a total 14.6p and 10% at current bombed out price. So investors are being paid to wait for something to turn up. Meanwhile this 147p share price looks a too extreme low. 

I hold all 6. 

Secure Trust Bank (LON:STB) Would love to hear any views regarding  news of a reduced divi after today's somewhat less than positive presentation with no mention of the FCA commission investigation.

This one won’t appeal to everyone but the plus points are so strong that it’s worth posting on it for anyone wanting to check further. 

Coal producer Thungela Resources (LON:TGA) issued their results today. Link here:-

https://www.stockopedia.com/sh...

The share price is down 70% from the £18 peak in September 2022. 

Why?

Because the spot coal price is also down 70% from $450 a tonne peak in Sept 2022 to just $130 now and that’s a slight recovery from the recent $120 low. 

The good news today? 

Results  as expected and fairly optimistic outlook too. KEY plus is the 10 rand a share dividend. That’s about 42p to give 9% yield just for that one dividend! The next dividend in September will again depend on the level of the spot coal price. If it holds around current level then it could well be another 42p, and if coal rallies then coukd well be higher. So potentially a near 20% yield! 

It goes ex dividend on 18th April and pay day 7th May. 

For those who like buybacks Thungela Resources (LON:TGA) also announced a R500 million buyback. 

Stockopedia 91 for quality and 99 for value. 

I bought after the trading update last month and because the coal price looks as though it might have bottomed at long last! The share is up 26p today to £4.70. It bottomed at £4.20 last month. 

Thungela Resources (LON:TGA) is easier to assess for potential share price gains or losses than many shares. A higher coal price feeds through to a higher Thungela Resources (LON:TGA) share price and vice versa. 

Here’s a link showing coal price and a lot of other commodity type prices:-

https://tradingeconomics.com/c...

Good to see some of the old Mike Walters stalwarts here , re Liontrust Asset Management (LON:LIO) there was a rumour this week they were going to merge with Artemis but this was denied by management. When sentiment turns this bombed out sector should fly.

Out of interest chaps any idea how the Reddit group is getting on with the old MW members I got side tracked by work so never signed up is it thriving or stuck in the stalls ?

Regards

Andy

I suspect a number of subscribers here get the regular weekly emails from Roland Head. Really fabulous that this guy (much like Cockney Rebel) prepares a weekly update and makes most of it available for free. If Roland is on this site and reading this then thank you!

The update on Supermarket Income REIT (LON:SUPR) caught my eye both the bull and bear arguments for holding.

Bull

# 77% of income is from Tesco (LON:TSCO) and J Sainsbury (LON:SBRY) so little credit risk.

# Much of the rent is index linked.

# LTV is 33% which isn't too stretched.# Average debt maturity is just over 4 years which could be a good thing with interest rates expecting to come down.

# Weighted average cost of debt is now 3%, which is not too high.

# One thing Roland doesn't mention is the directors have previously bought large holdings, often at prices much higher than today so they are committed.

Bear

# Roland says Supermarket Income REIT (LON:SUPR) is borrowing short to lend long which is not ideal, especially if interest rates do not come down.

# The article doesn't say this but surely having only 2 main tenants is surely a risk ?

Supermarket Income REIT (LON:SUPR) currently trades on a 17% discount to NAV with a yield of 8%. Definitely a better time to buy now than when this was trading at a premium to NAV.

https://tinyurl.com/3ebrcv6e

SSB

Hi Ken,

hope you don't mind me posting this here. I could equally post it on Charles' investment trust thread.

IC interview with Laura Foll of Janus Henderson. Laura is involved in 3 investment trusts:

Law Debenture (LON:LWDB)

Lowland Investment (LON:LWI)

Henderson Smaller Companies Investment Trust (LON:HSL)

Enjoyable listen, my notes below.

https://tinyurl.com/pyv5uutw

# Law Debenture (LON:LWDB) just published results. Very different trust because there is an embedded operating business which provides approx 1/3 of operating margin (and therefore good dividends). This enables the trust part of the investment vehicle to generate a lower risk yield.

# The point at which a company cuts a dividend can be an interesting time to take a look because it could be a recovery share eg: Marks and Spencer (LON:MKS) and Rolls-Royce Holdings (LON:RR.).

# Babcock International (LON:BAB) specialist defence market work, benefitting from geo-political tailwinds.

# Rolls-Royce Holdings (LON:RR.)  now successfully taking costs out. SP increase has been driven by earnings + free cash flow upgrades rather than re-ratings.

# UK dividend “addiction” mentioned by IC interviewer. LF response is UK market has shifted to be more like the US post-Covid ie: total return.

# Not sure what LF means when she says 45% payout ratio for UK market now versus 70% pre-covid ?

# Many UK dividends have been re-based.

# Financials are driving a lot of dividends in the UK: Beazley (LON:BEZ) is one of the leading insurance companies in cyber security with good returns in the US. 3% ordinary dividend is not much to get excited by but there should be either a buyback or special dividend. Barclays (LON:BARC) is returning 50% of it's market cap (I'm sure I heard this right).

# Red flags on income stocks: eg GSK (LON:GSK) couple of years back.

# Marshalls (LON:MSLH) Profit Before Tax down 50% but the payout ratio it now operates makes LF’s job easier because she does not have to consider it might happen,

# Trust structure is an advantage over open ended funds. SSB: we know this!

# 2 potential valuation discounts being applied to UK market: is it structural ie: is the UK market broken ? Or is it cyclical ? SSB: hopefully the latter!

# De-equitization of UK market is “shocking”. 10% of UK operating companies went last year! Policy required to reverse this trend.

# Law Debenture (LON:LWDB) holds 88% UK shares which is historically high.

# Brick manufacturers could come good if/when interest rates are cut.

# Law Debenture (LON:LWDB) holds 150 stocks, Lowland Investment (LON:LWI) holds 100 stocks and Henderson Smaller Companies Investment Trust (LON:HSL) holds 80 stocks.

# LF wary of themes. Instead, she looks for diversification. Some investors tells Janus Henderson they hold one investment because it is an easy, long-term approach for total return. Therefore, LF looks to make sure there is diversification and share prices don’t move in synch with one another.

# Takeover valuations and prices are different between peer to peer versus private equity. The latter tend to generate much lower valuations and therefore also lower takeover prices with private equity knowing certain fund managers are in outflow, need the cash and will vote for the takeovers.

# Valuation (NAV) matters. SPs just move around. SSB: we knew this as well but always good to be reminded of it.

Partly to try and keep this thread alive and as a follow up on some of the shares covered in the header post:-

TP Icap (LON:TCAP) 188p. 

Note. Final Results are this Tuesday. Also FT article yesterday about the possible sale or ipo of Parameta Solutions. Apparently it could be worth up to £1.5 million in an ipo…..and the market cap of TP Icap (LON:TCAP) is LESS at £1.4 billion. 

DIVIDEND YIELD is  6.8%.  Big increase in final dividend last time from 5.5p to 7.9p. Interim also increased. Dividend policy is 50% of adjusted post tax earnings for year as a whole. 

I bought and posted on TP Icap (LON:TCAP) on Mike Walters site at just £1.04p extraordinary low in July 2022. A rare occasion of timing the post and buy at the exact oversold bottom. Worth checking out ahead of the Results in case they surprise on the upside?  

Note share is down 2% ytd, up 2% 1 year and down 31% over 5 Years. Peaked at £4.11 in Jan 2020. 

Now an update on others covered in the header post here:-

Aviva (LON:AV.)  468p

Very good Results last week greeted with big initial share price gain that fell away to modest rise by the close. DIVIDEND INCREASED to 23.3p (ex 11th April and pay day 23rd May). AND future increases policy of mid single digits. Share has recovered from way oversold,  but still cheap and with 7.5% dividend yield. 

Legal & General (LON:LGEN)  249p. 

Their Results last week fell a tad short of expectations. Reverse of what happened with AVIVA share price as initial double digit fall was mostly recovered by the close. Final dividend 14.63p (ex 25 April and pay day 6th June). “Continuing our progressive dividend policy.” 5% dividend increase for 2024. Dividend yield 8%. 

Abrdn (LON:ABDN) 152p. 

Different to all the others covered in that performance has been dire and share price fall from £5 deserved. They’ve merrily bought back their shares for years starting at £5! So much for these buybacks rewarding their shareholders. 

BUT! Now oversold? They’ve got assets way north of current market cap. And dividend is 9.6%. Final dividend of 7.3p (14.6p total) goes ex div on 14th March and pay day 13 April. 

Is Abrdn (LON:ABDN) a possible bid target? 

M&G (LON:MNG) 231p. 

Recovered from crazy 177p low this time last year. Results March 21st. Has increased dividends up till now. Yield 8.5%. 

Phoenix group (LON:PHNX)  510p. 

Results 22nd March. Dividend 10.2%. Share is down 20% since this time last year for no obvious reason and fell to just 441p last October. So so so often those extreme falls are BUY opportunities….yet I know of folk who panic sold on that October 2023 share price fall just because of that fall instead of for investment reasons. 

Liontrust Asset Management (LON:LIO) 681p. 

Share price recovering from extreme lows but still a shadow of £25 peak in 2021. Ytd up 13% but down 37% 1 year. Failure of the proposed acquisition of GAM didn’t help. Stocko figures like Liontrust Asset Management (LON:LIO) with 98 for quality and 94 overall. 

Chesnara (LON:CSN) 262p. 

I’ve held for ages and it’s proved to be a poor investment. Ytd flat and down 8% 1 year. That’s despite 19 years of dividend increases and a 9% yield. Results are at the end of this month. Another potential bid candidate? 

Polar Capital Holdings (LON:POLR) 442p. 

At least it’s up from extreme low of 396p last October! Dividend yield is 10.5%. Results not until June. They’ve got some good performing funds and Trusts and share looks oversold. As with Liontrust Asset Management (LON:LIO) the Stockopedia figures like it with 98 for quality and 94 overall. 

The huge dividends from all  these shares are a BIG attraction while we wait patiently for the share prices to go on sustained good runs. Such high yields used to be a warning sign of unaffordable dividend or worse, but note again that dividends of the Companies in this post are often seeing increases. It reflects way undervalued shares and NOT a warning). Hence why so many quality UK Companies are falling to (often foreign) bids. 

I really liked the following podcast interview with Lauren Templeton who is the niece of Sir john Templeton. Along with her husband, she runs an investment firm that focuses on value investing in the long-term.

https://tinyurl.com/3788k7sd

My notes:

5 mins: John Templeton (JT) was asked why he saves 50% of what he earned. He said "I save 50% of what I earn in order to take advantage of the opportunities that are coming" (SSB: I just don't know WHEN they are coming).

7 mins: JT was investing in Japan in the 1950s when Japan was hugely unpopular, partly because of WWII and partly because no one was interested.

12 mins: his philosophy was to invest at times of maximum pessimism.

17 mins: Google John Templeton + Financial Chaos Memo, it is worth reading according to LT (Lauren Templeton). I think my link below is the correct one to read.

https://tinyurl.com/bdfjmdem

25 mins: JT liked buying closed ended investment trusts at a 30% discount!

30 mins: LT speaks about so many of the psychological dangers: who you hang around with + trying to respond to short term market moves + FOMO.

41 mins: James Montier biases are worth reading about. SSB: I have listened to his book and it is a good read.

46 mins: process information slowly + make deliberate decisions.

48 mins: invest in well capitalised businesses. Don’t be reliant upon the kindness of strangers.

49 mins: LT looked at dividend paying stocks to benefit from at a time of high inflation.

50 mins: LT is currently looking at opportunities in small caps.

53 mins: use different metrics to understand value in stocks.

56 mins: maximum pessimism in China right now + valuations are compelling eg: Alibaba trading on 7.2 times earnings, Baidu trading on closer to 9 times earnings.

Very easy and enjoyable listen.

SSB

A BARG post to try to help this thread along. Delighted to see The Pheonix (scammers) and george54 (grecian) from the old Mike Walters site on Stockopedia. I recall some good posts from both in the past, it's a pity Stockopedia doesn't allow users to 'follow' favourite posters. Maybe one for the developers to add to their list of endless requests.

I went through a few old(ish) IC articles today, thought they may be of interest. I think even for those who don't subscribe, you can sign-up for 3 free pieces per month so long as they are not lead articles. In fact, I am often able to read IC articles when I just type the headlines into Google.

Six signs that the UK economy is looking up (02.02.24) 

http://tinyurl.com/ymuapwez

In short: energy bills will drop again in April, base rates will drop this year (SSB: the HL savings module certainly shows this being priced in as various savings providers fixed rates drop off the longer the offer is for), mortgage rates are dropping back, tax cuts are on the way (SSB: although likely to be reversed by a future Labour government) and finally we should avoid a bad recession (SSB: but the national debt is higher than ever and that is often ignored and will be a problem.... some day). The conclusion is that the UK market, especially small and mid caps are cheap compared with their US peers.

The above point is also made by Simon Gergel of Merchants Trust (LON:MRCH) who likes the look of Lancashire Holdings (LON:LRE) in the following article.

http://tinyurl.com/2s3m3cbk

Taking a closer look at Lancashire Holdings (LON:LRE), the dividend is very appealing but I don't know much about the business. Stockopedia describes it as:

Lancashire Holdings Limited is a provider of global specialty insurance and reinsurance products with operations in London, Bermuda, and Australia. It operates through two segments: reinsurance and insurance. The reinsurance segment contains casualty reinsurance, property reinsurance and specialty reinsurance. Casualty reinsurance comprises casualty, professional and financial lines, and accident and health reinsurance. Property reinsurance comprises its catastrophe exposed reinsurance classes as well as its excess of loss risk and other property treaty portfolios. Specialty reinsurance comprises its reinsurance offering for classes, such as aviation, marine and energy, as well as its property retrocession portfolio. The insurance segment includes aviation insurance, casualty insurance, energy and marine insurance, property insurance and specialty insurance. Casualty insurance comprises its accident and health insurance sub-class and a small amount of professional lines insurance.

Looking at the operating profit, it seems that maybe this is similar to a Lloyds name ? In years when claims are low, Lancashire Holdings (LON:LRE) makes good profits (and presumably cash flows) but in years when it has large claims to pay, that obviously impacts profits. Searching on Google, it seems Lancashire Holdings (LON:LRE) does have a part of it's business in some of the Lloyds syndicate so not the same risk profile as say Aviva (LON:AV.) . Any strong views ? I will probably add this to my list but seems there is some work to do in order to understand just how risky the underlying business is.

I will continue to hold Legal & General (LON:LGEN) with the following article giving a clear explanation of the different divisions and the effects on those of interest rate movements. Well worth a read.

http://tinyurl.com/3hh5rcy7

Jet2 (LON:JET2) had a decent trading update. Stocko has this trading on a PE of 8 with net cash of 1.8bn. People that can afford to get away on holiday will continue to do so. But there is something about investing in an airline I'm not that keen on. So many things can go wrong!

http://tinyurl.com/39j4ecs6

And a positive trading update from XPS Pensions (LON:XPS) which is on my RNS update list because I heard John Lee mention he liked this business a year or so ago. 

http://tinyurl.com/4a6zyrk9

The Ithaca Energy (LON:ITH) SP is at an all time low despite. I sold a while back but recall getting a decent dividend. Stocko has a yield of almost 18% which is hard to believe. Ithaca Energy (LON:ITH) seems to have large capital outlays on the Rosebank project which is not expect to produce until 26/27. 

http://tinyurl.com/fvx6cwuz

Thoughts on the above welcome. Any favourite bargains out there, maybe from the original list ?

SSB

Graham.

According to Charles Mitchell on the small cap bb today, Secure Trust Bank (LON:STB) have said in a reply to a question from him that if a statement about their exposure to those motor loans is needed it won’t be until after the publication of the FCA Report, expected towards the end of this year. Also share price reaction suggests investors are sanguine about this. 

sevenccc. 

Good to see your two posts. I haven’t followed ME International (LON:MEGP) or Arrow Exploration (LON:AXL) so can’t offer any thoughts.

It would be good if you got replies  and if there were more responses and new posts here, but not sure it’s going to happen. Pleased to see some excellent posts on Investment Trust thread including today, like the one from Donald Pond. And Charles Mitchell,  with experience in the sector is providing anyone interested in investing in Investment Trusts with high quality too. 

As for Labour and North Sea oil;- once in power and when reality often strikes political leaders some of (often a lot of) their manifesto commitments are quietly dropped or put on the back burner. That might well apply with their current commitment on North Sea Oil. It makes no sense at all hammering UK oil producers and instead importing at totally unnecessary cost, oil from more polluting Countries. 

Any thoughts on why ME International (LON:MEGP) is bucking the market and heading down? Seems to be a commentators favourite but the IIs not interested. Is this the family shareholding acting as a damper or some broader concern? Enjoyed Paul Scott's washing expose last week. Always good to wash your dirty laundry in public!

Arrow Exploration (LON:AXL) looks value at fPE of 2 with output doubled last year and due to double again this year. Mainly development wells being drilled in Columbia. Net cash and fully funded for 11 drills this year. 

Personally looking to avoid small North Sea only oilers as we get closer to a Labour Govt.

Partly to keep this thread in view, here’s how the shares in the second part of that  initial post  on this  thread (pasted at the end of this update on November 13th) have done so far.

Opinions on these and other BARGAIN priced alternatives woukd be good and help ensure that more Stocko subscribers see the many excellent threads beyond the also excellent Small Cap Value Report thread. 

Tritax EuroBox (LON:EBOX) up 20% to 59p. REITS in general look correctly priced for now until direction of interest rates is clearer. 

Foresight Solar Fund (LON:FSFL) up 11% to 101p. 

Good Energy (LON:GOOD) up 28% to 364p. Could be a lot more to come, as long as what look ambitious profits targets are shown to be overblown. Highly rated on Stocko figures. 

Harbour Energy (LON:HBR) up 30% to 304p on recent corporate news. 

Jupiter Energy (ASX:JPR) DOWN 3% to 78p after disappointing update well covered by Graham on small cap thread this week. 

Persimmon (LON:PSN) up 27% to £14.45 helped by update more upbeat than expected this week. How soon housebuilders bounce a lot more depends on direction of interest and mortgage tates. 

Barratt Developments (LON:BDEV) up 20% to 545p. 

Serica Energy (LON:SQZ) flat at 219p. Looks very cheap and big dividend. 

Supermarket Income REIT (LON:SUPR) Up 5% to 84p. 

Secure Trust Bank (LON:STB) up 7% to £7 and like Osb (LON:OSB) which I also hold looks very cheap, with big dividend while we wait. 

BlackRock World Mining Trust (LON:BRWM) Up 5% to 557p. Volatile sector but buying the dips will work well if clean energy demand and supposed lack of supply leads to major new Mining sector bull market. 

Overall gain for these since Nov 13 is 14%. 

FTSE 100 is up 3% since my post.

FTSE 250 is up 8% 

FTSE AIM is up 6%.

NASDAQ is up 10% 

DOW JONES is up 10% 

RUSSELL 2000 is up 15%. 

I hold all the above shares and Investment Trusts. Below is the paste of the second part of my initial Nov 13th post on this thread. 

“Which ones to add to the above list to do as well or hopefully even better in the year ahead?

I’ve bought these since that post.

Tritax EuroBox (LON:EBOX) 48p and 9% dividend. Looks way oversold with much of the big share price fall simply because the share price has gone from a premium to big 49% discount to NAV.

Foresight Solar Fund (LON:FSFL) 90p and 8% dividend. Looks oversold.

Good Energy (LON:GOOD) 290p. It’s soared again on news today. See posts today on Small Company thread too.

Harbour Energy (LON:HBR) 232p 8% dividend. Labour Government and a lot of bad news now looks priced in.

Jupiter Fund Management (LON:JUP) 81p. Dividend cut very likely but looks cheap and chance of a bid.

Persimmon (LON:PSN) 1157p and 7% dividend and Barratt Developments (LON:BDEV) 447p and 7.5% dividend OR other housebuilders! At least one looks a must (e.g PSN is down 70% from peak) and dividend increases and big share price gains to come when interest rates drop a bit. Often strong cash rich balance sheets and so different to the 2008 housebuilders share price crash when balance sheets were stretched and the likes of Taylor Wimpey (LON:TW.) fell to about 2p! What a buy opportunity that was ..but I missed. It!

Serica Energy (LON:SQZ) 218p and 11% dividend. As with HBR a Labour Government sticking Roth they’re no more new North Sea oil developments looks priced in now.

Schroder Real Estate Investment Trust (LON:SREI) 42p and 8% dividend and

Supermarket Income REIT (LON:SUPR) 79p and 7.5% dividend. I have held several Investment Trust REITS since 2020 (best performer is Aew UK Reit (LON:AEWU) where with dividends included I’m up 100% even after recent sector wide falls. We’re spoilt for choice now but SUPR particularly looks well worth checking out as Supermarket customers are as solid as it gets!

Secure Trust Bank (LON:STB) 650p and 7% dividend. I bought last week as PE 3 and big dividend looked irresistible!

BlackRock World Mining Trust (LON:BRWM) 527p 6.5% dividend, Dividend is much higher in good years. Foe any not wanting to buy Mining shares like Rio Tinto (LON:RIO) BHP(LON:BHP) Anglo American (LON:AAL) Glencore(LON:GLEN) etc then BRWm looks the best Investment Trust choice to play a sector where a big bull market ahead is likely. E,g Renewables/Electric demand AND demand likely to outstrip supply.”

Hi Ken, I noticed the FCA has launched an investigation into motor finance - does this concern you with ref to your Secure Trust Bank (LON:STB) holding?

Thoughts on ShoeShineBoy and Graham’s posts. AND a stunning big dividend payer at the end of this. 

HOUSEBUILDERS. 

Happy to hold on to Persimmon (LON:PSN) after their surprisingly upbeat update yesterday and Barratt Developments (LON:BDEV) too. Sector performance for a while will depend on inflation news and fears of Red Sea terrorism escalating. Might therefore be a better buy opportunity ahead? 

Marks and Spencer (LON:MKS)

Wasn’t surprised at the 14p share price fall today despite excellent trading update. It was the more uncertain outlook hat spooked investors along with profit taking after a great run. I’m happy to hold as bought at just over £1 but wouldn’t be buying now until a dip. 

COMMERCIAL PROPERTY REITS. 

Again a pause liklely until direction of inflation and interest rates is clearer. I’m continuing to hold mine and am very tempted by CLS Holdings (LON:CLI). More on why if anyone asks. 

GRAHAM

I haven’t looked at RTW Biotech Opportunities (LON:RTW) as I have recently bought Biotech Growth Trust (LON:BIOG) again after reading g this Manager comment:-

“Our confidence in a recovery is underpinned by the absolute valuations of emerging biotech, which are now sitting at unprecedented lows. One objective measure of looking at valuation is to look at the ratio of a company’s market cap to net cash on the company’s balance sheet. Figure 5 (on page 9 of the Half Year Report) shows that the median ratio for the biotech industry is now at all-time lows, below that of the dot com bust, the Global Financial Crisis, and the Hillary Clinton drug pricing tweet in 2015. As shown in Figure 6 (on page 10 of the Half Year Report), about 25% of the biotech universe representing over 120 companies are now trading at market caps below the net cash on their balance sheets. Importantly, while 10-year U.S. government yields are currently above 4%, 10-year rates were also above 4% in the 2004-2007 timeframe and yet valuations back then were not nearly as low as they are now. We believe the impact of higher interest rates is more than reflected in current valuations and the emerging biotech sector is extremely oversold.”

FINALLY TO THIS STUNNING BIG DIVIDEND PAYER

It’s Amedeo Air Four Plus (LON:AA4) which I luckily bought about a year ago at 34p. It’s still only 43p. 

Read the dividend news today. It’s eye catching. They’ve increased the already huge dividend AGAIN. That’s the 3rd increase in a year. It’s now 2p a quarter and 8p a  year. That’s a yield of 18% a year. AND they are confident about paying at least (I.e don’t rule out another increase) 8p a year until July 2026.

Don’t expect a big share price gain but the dividend alone means 36% annualised by the end of 2025. Dividend will be cut after July 2026 and share price fall ahead of that date is likely. And share price will eventually be dependent on  likely terminal value of their planes on hire to Emirates. 

Amedeo Air Four Plus (LON:AA4) goes ex the next 2p quarterly dividend next Thursday 18th Jan and pay day is Jan 31st. 

Thanks to Ken, Graham and Ben for the feedback. Good to keep the back and forth going. And I like to revisit your original list Ken, most are quality shares. I may check out the StockRanks when I have more time at the weekend.

Interesting to see MJ GLEESON (LON:GLE) come off 8% today. Written up on today's SCVR of course. Comparing the two again, I prefer Taylor Wimpey (LON:TW.) just on the basis it had 700m of cash sitting on the balance sheet at the half year 2023. Hope there is no read across from MJ GLEESON (LON:GLE) in terms of legacy costs. We will see on Thursday I guess.

I thought the following was interesting in terms of how the grocers appear to have performed over the Xmas period. Aldi and Lidl appear to have done well. Marks and Spencer (LON:MKS) as well. I have held Tesco (LON:TSCO) for a number of years and they seem to have done okay as well (Tesco (LON:TSCO) are also reporting on Thursday). And J Sainsbury (LON:SBRY) also seem to have done okay. Does that mean that Morrisons and Asda are the losers ? http://tinyurl.com/mth6fvyp

Always enjoy reading John Kingham's monthly (I think ?) update. I prioritised dividends myself as the markets got rocky in early 2022 and achieved my highest ever dividend income in 2023. I did this along with selling my biggest losers before they got out of hand; this included Supermarket Income REIT (LON:SUPR) and Tritax EuroBox (LON:EBOX) as interest rates increased and also North Atlantic Smaller Companies Investment Trust (LON:NAS) as the flow of reporting dried up and the discount to NAV widened. The HL site has a really nice function to clearly see dividend income for either calendar or tax year. Maybe I should start looking at total return again though with interest rates forecast to fall. http://tinyurl.com/yeykad3s

SSB

Marks and Spencer (LON:MKS) Christmas Trading Update expected on Thursday. Cockney Rebel has written some positive notes over the last few months on his web site. Worth reviewing. http://tinyurl.com/3bdnh49b

I just watched the half year results presentation and it was certainly very positive but also with mgt saying there is more to do. The first 30 minutes is the pre-recorded presentation by the CEO and FD followed by investor Q&A. http://tinyurl.com/w5j4b4ky

Marks and Spencer (LON:MKS) seems to have shaken off it's old 'fuddy duddy' (is that a word ?!) image. On my recent visits, staff have been super helpful. And it feels like one of the busiest shops on the high street. But still it is dependent on shopper numbers. Any views pre-Thursday ?

I think Taylor Wimpey (LON:TW.) will also give a trading update ? Again, any thoughts ? I think I'm right in saying Paul Scott prefers MJ GLEESON (LON:GLE) given their leaning towards building affordable houses in the north of England. Comparing the two housebuilders, Stockopedia prefers Taylor Wimpey (LON:TW.).

SSB

Main reason for postIng this is to save this thread getting lost. 

Another reason is simply to state the obvious; if we buy quality at a bargain price we shouldn’t go far wrong. 

The final reason; don’t continue to hold our mistakes. Once we know it’s going wrong SELL! 

So from that historic post first:-

Biggest winners are Marks and Spencer (LON:MKS) up 165% to 272p  crazy oversold 102p. B&M European Value Retail SA (LON:BME) up 75% from 326p to 567p and Vertu Motors (LON:VTU) up 60% from 43p to 70p. 

I stil hold  Vertu and Marks but took the profit on B&M. 

The only losers are Sylvania Platinum (LON:SLP) down over 20% from  91p to 71p (excluding big dividends). I sold lower than it is now. 

Henderson Far East Income (LON:HFEL) down over 20% from 265p to just 208p where the dividend yield is now 11%. I’ve averaged down  this awful performer because optimistic new Managers will improve performance. Sacrosanct dividend because of their insistence on keeping up their record of multiple years of dividend increases is the reason for the awful share price performance. Plenty more on all this in their recent update, 

Chesnara (LON:CSN) Down a bit from 272p to 257p. Has been completely overlooked in the recent rally and looks well worth checking out. 

Now to the second part of that original post from last month. . It was on 11 shares and Trusts that looked oversold. Good news is that all of them are UP. 

Tritax EuroBox (LON:EBOX) up 25% from 48p to 60p.

Foresight Solar Fund (LON:FSFL) up 8% from 90p to 98p.

Good Energy (LON:GOOD) up 20% from 290p to 341p. 

Harbour Energy (LON:HBR) up 35% from 232p to 322p. All that gain was just yesterday and today after the news of their acquisition of most of the assets of German Wintershall Dra that will more than double Harbour’s production AND make Harbour much less reliant on North Sea. 

Jupiter Fund Management (LON:JUP) up 11% from 81p to 91p 

Persimmon (LON:PSN) up 20% from 1157 to 1388 

Barratt Developments (LON:BDEV) up 25% from 447p to 565p 

Serica Energy (LON:SQZ) only up a bit from 218p to 234p. Could they do a deal too?

Schroder Real Estate Investment Trust (LON:SREI) again only up a bit from 42p to 45p. Most of the Commercial Property REITs have soared but for reason I can’t fathom, SREI hasn’t yet joined in, 

Secure Trust Bank (LON:STB) Again only up a bit from 650p to 660p. Looks so cheap. 

BlackRock World Mining Trust (LON:BRWM) up 9% from 527p to 576p. 

I hold all these except B&M and SYLVANIA. 

Hope there will be a few replies suggesting other oversold investments that have not bounced too much in the recent rally. 

Would it be helpful if Stocko gave us a graph of Market Cap as an alternative option perhaps to the share price? Where number of shares in issue has changed significantly following SP and maybe anticipating mean reversion, or even just looking for patterns in sp movement as a guide at a top level, can be misleading.

Many companies raised to survive COVID and lots of others are doing buybacks so it's not a one way street. I'd be interested in being able to toggle between the two for each stock. Would anyone else consider this of use?

btw….there is a lack of understanding, even sometimes among otherwise competent and experienced investors, about the attractions of dividend shares

You’re very sensitive to criticism, Ken. When someone highlights a counterpoint to your thesis, it doesn’t mean they don’t understand your argument or the potential benefits of the strategy. And it does you no credit to respond with ad hominem attacks. 

The benefits of dividend investing are well understood by me and others who choose an alternative strategy. It’s just not for us. Partly that’s down to the preponderance of old economy businesses amongst high yielders. To a considerable extent it’s because we only want to own companies that can reinvest their cash flows at rates much higher than their cost of capital, where dividend distributions become a drag on growth. And finally it’s because buybacks are much more tax efficient for me.

Yes, dividend investing is a proven strategy. But there are plenty of alternatives. And it pays to engage without emotion in debating their relative merits. Good luck with your strategy. I do see a lot of relative bargains amongst investment trusts today, so I expect you’ll do well.

This thread is beginning to get more recognition. Hope that continues as there are bargains galore at present and not just the small caps that are so popular and so well analysed here.

There have already been posts here and on Investment Trust threads on the extraordinary number of current Investment Trust bargains . So in this post I’ll cover 12 shares that look far too cheap and will not include any Investment Trusts. I hold all of them so hope my confidence is justified.

If anyone thinks it isn’t then please post why not!

Here goes.

These UK oil shares all look stunning value.

Ithaca Energy (LON:ITH) 163p. Up10p today in belated positive reaction to their results yesterday. PE 5. Dividend a whopping 17% and they’ve just confirmed another 10p or so dividend to come. Debt falling fast. Share is DOWN 16% over 1 year.Recent low 140p. Gets 96 for value on stock page here.

Serica Energy (LON:SQZ) 213p. Up 6p. Dividend 10% and PE just 2.5. See Greater Buchan news today where Jersey Oil and Gas (LON:JOG) (which I also hold) has agreed to farm out 30% interest in North Sea Buchan Field to Serica. The deal sees Jersey Oil and Gas (LON:JOG) up 20% today but it’s riskier than the other oil shares covered here, despite great enthusiasm from Simon Thompson and Malcy. Excellent recent article on Serica from Roland Head. Share is DOWN 28% 1 year and recent low 193p. Gets 95 for value and 96 overall.

Harbour Energy (LON:HBR) 223p. Up 3p. PE6. Dividend 9.5%. Down 1 year 28% and recent low 220p. So it’s at the year low! Gets 95 for value.

Next to these Fund Managers. As most will know their share prices take a big hit in bear markets thanks to big outflows from their Funds. And then soar in bull markets as big net inflows instead. So many investors buy the peaks and sell the dips instead of doing the obvious and buy the dips and sell the peaks. Fund Manager shares bought at appropriate time are often far better investments than their Funds are!

EDIT. Sorry. Further oil shares in the wrong place! 

Gulf Keystone Petroleum (LON:GKP) 129p. Low85p. DOWN 38% 1 year and down from 302p high.PE 2.5. NO dividend. ( Stockopedia figure as too often with dividends is wrong). Gets 94 for value. GKP paid about 40% in just a year in dividends….until BOMBSHELL BAD NEWS of the sudden closure of the IRAQ/Turkey oil pipeline. It’s now been closed for months and each expectation that it will open again hits the dust. GKP is managing to sell enough oil to survive this and if the pipeline reopens the share price could soar AND open the way for very big dividends again too. BUT IRAQ oil is obviously risky and until the pipeline reopens it’s just a punt.

Petrotal (LON:PTAL) 50p. Low 34p. 1 year now up 15%.PE4 and 9.8% dividend. Gets 92 overall.

So. Now to Fund Managers! 

Premier Miton (LON:PMI) 61p. Recent low 49p. 1 year DOWN 35%. PE 10 and 9% dividend. Another attraction of this sector is the possible continua of sector consolidation via bids.

Polar Capital Holdings (LON:POLR) 460p. Recent low 396p. 1 year DOWN 6%. Dividend 10%. PE 13. Much more richly valued than the others but that reflects among other things some very successful Fund performance.

Jupiter Fund Management (LON:JUP) 82p.Recent low 74p. DOWN 34% 1 year. 6% dividend if held. PE 9.5. 93 for quality and 92 for value.

Liontrust Asset Management (LON:LIO) 571p. DOWN 18p today but it went ex the next 22p dividend today. Recent low 525p. Dividend 22.2% and PE 8. Share price was (far too?) hammered when Liontrust decided NOT to overpay for GAM. Gets 98 for quality.

Others.

Cavendish Financial (LON:CAV) 7.5p. Cavendish is the recent combination of FinnCap and Cenkos. IF AIM market at long last on the way up the newly formed Cavendish could  win a lot of new business.

Good Energy (LON:GOOD) 306p. And DOWN from 370p just a couple of days ago. 1 year up 56% because of recent very fast gains. PE12 but explosive increase in EPS forecast. Gets 99 overall too. Could go way higher but it’s one to buy the so far temporary dips rather than get sucked in at latest top.

Secure Trust Bank (LON:STB) 650p.1 year FLAT. Low 550p.PE3 and dividend 8.2%. Gets 97 for value.

Finally a key attraction of most of these is the exceptionally high dividend yields which reflect how cheap the share is in most cases and NOT a high risk of dividend cuts. And that up to 17% dividend yield is a great gain annualised even with no share price gains at all. BUT the likelihood is that in the next bull market the dividend yields for most of these shares will reduce to more normal levels via big increases in the share prices.

I do hold many of the same Ken. Looking Tatton Asset Management (LON:TAM) at this moment. AUM growing.

Money managers look historically cheap.

Posting to bookmark and review later

All,

just heard on the news that the Chancellor might be thinking about trying to help the housing market by giving some sort of incentive to first time buyers, by way of ISA's and government input into the investment (25% match up to £3,000) which can only be used as a deposit.  They and other banks are also talking about lower fixed rate mortgages and only 5% deposits.  Could be good for house builders, especially those who specialise in starter homes.  With interest rates looking more likely to go down rather than up, the builders, at least the ones with the insurance of big dividends are looking more attractive all the time. 

I have a holding in Taylor Wimpey (LON:TW.)

Graham.

Thanks for reverting Ken. Again, it's a shame subscriber's can't click on poster's names and see a list of their posts. Anyway, I am starting to get into the habit of "cleaning" all of the unread posts by making sure there are no numbers in red on the right of the screen against the various threads. I now know I need to treat all of them equally (unlike the MW board where I pretty much ignored posts relating to EDEN and JAY etc). Having said that, I do hope this BARG thread can continue, even if it means posting twice on Stockopedia.... once on the SCVR and once here.

I spent a few hours cleaning up the garden this afternoon and listened to Paul Scott's latest podcast. He mentioned several times how cheap some shares are (eg - GLE) and how many quality British companies are being bought out, either by US competitors or Private Equity. We are seeing the same thing in investment trusts (eg - ASL trades on an average PE of 8 plus so many REITs and infrastructure trusts trading at larger than usual discounts). In previous markets, I would have been wary but this time round I am more willing to put cash to work.

SSB

Hi Ken,

I told you there would be interest in a Bargains thread, look at the number of 'reads' if not 'recommendations'. This thread is DEFINITELY worth continuing!

Hope you don't mind me re-visiting your original list posted on 04/10/22 (the mini budget that sparked the sell-off was announced on 23/09/22), those prices, plus the prices one month later (after the Bank of England bought gilts in the open market and parts of the market quickly recovered) and the prices now look like this:

ABDN 142p on 04/10/22 (169p on 04/11/22) 172p now 8% yield StockRank now: 69

AV. 407p on 04/10/22 (429p on 04/11/22) 422p now 8% yield StockRank now: 60

BME 326p on 04/10/22 (341p on 04/11/22) 537p now 4% yield StockRank now: 86

CSN 272p on 04/10/22 (268p on 04/11/22) 268p now 9% yield StockRank now: 58

CTY 388p on 04/10/22 (396p on 04/11/22) 396p now 5% yield StockRank now: n/a

HFEL 265p on 04/10/22 (257p on 04/11/22) 206p now 11% yield StockRank now: n/a

LGEN 234p on 04/11/22 (238p on 04/11/22) 229p now 9% yield StockRank now: 29

MNG 172p on 04/10/22 (176p on 04/11/22) 205p now 10% yield StockRank now: 59

MKS 102p on 04/10/22 (112p on 04/11/22) 255p now 2% yield StockRank now: 96

PHNX 552p on 04/10/22 (551p on 04/11/22) 590p now 11% yield StockRank now: 30

POLR 414p on 04/10/22 (418p on 04/11/22) 451p now 10% yield StockRank now: 89

RCH 78p on 04/10/22 (105p on 04/11/22) 77p now 9% yield StockRank now: 87

SLP 91p on 04/10/22 (88p on 04/11/22) 70p now 4% yield StockRank now: 81

TCAP 202p on 04/10/22 (175p on 04/11/22) now 184p 7% yield StockRank now: 99

VLX 252p on 04/10/22 (248p on 04/11/22) now 302p 1% yield StockRank now: 82

VTU 43p on 04/10/22 (47p on 04/11/22) now 85p 3% yield StockRank now: 90

DNLM 783p on 04/10/22 (878p on 04/11/22) now 1089p 6% yield StockRank now: 73

VOF 463p on 04/10/22 (414p on 04/11/22) now 463p 1% yield StockRank now: n/a

VNH 274p on 04/10/22 (234p on 04/11/22) now 312p 0% yield StockRank now: n/a

Note that for MKS the Oct-22 price happened to coincide with the multi year low for MKS. Also, the Vietnam trusts were clearly impacted by other events outside of the UK (Vietnam seems to sell off every now and then due to a general lack of discipline in the market, mis-selling of bonds, that sort of thing etc).

Re-creating the above list in terms of gains excl dividends based on prices on 04/10/22 to now (with gains excl dividends based on 05/11/22 to now in brackets): 

MKS +150% if bought on 4 Oct and held to now (+127% if bought on 4 Nov 22)

VTU +98% (+81%)

BME +65% (+57%)

DNLM +39% (+24%)

ABDN +21% (+2%)

VLX +20% (+21%)

MNG +19% (+16%)

POLR +9% (+7%)

VNH +13% (+33%)

PHNX +7% (+7%)

AV. +4% (-2%)

CTY +2% (-%)

VOF -% (+11%)

CSN -1% (-%)

RCH -1% (-27%)

LGEN -2% (-4%)

TCAP -9% (+5%)

HFEL -22% (-20%) 

SLP -23% (-20%)

And re-creating the list again assuming a full year of dividend yield paid (going through half year and quarterly dividends is too much work!). Using 04/10/22 buy date only:

MKS +150%

VTU +101%

BME +69%

DNLM +45%

ABDN +29%

MNG +29%

VLX +21%

PHNX +18%

POLR +19%

VNH +13%

AV. +12%

CSN +8%

RCH +8%

LGEN +7%

CTY +7%

VOF +1%

TCAP -2%

HFEL -11%

SLP -19%

Pretty basic analysis. I'm sure this can be done in Stockopedia somehow (comments from Stockopedia staff welcome :-) but on this occasion it was quicker for me just to do it manually.
Conclusions to draw from the basic analysis above ? 

My thoughts fwiw....
# Congratulations on a great post back in Oct-22, your timing was very good. Especially on MKS which as per above was at a multi-year low (looking at the chart, the SP did dip to a slightly lower price back in Oct-20 but that was during Covid so not normal trading conditions).

# The market recovered quickly and buying one month later did not produce the same gains eg: DLNM 39% gain from Oct-22 versus 24% gain from Nov-22.

# Big dividend payers naturally increased the gains, that's just maths. But it's got to be said, some of the dividends are worth having on their own! 

# High quality and lack of volatility certainly helped. HFEL and SLP are at the bottom of both non-dividend and incl-dividend tables. I sold HFEL a while ago because the massive dividend just doesn't make up for the constantly falling share price. I bought SOI instead because I want exposure to the Asia, the dividend is half of HFEL but the price is more stable. SLP is volatile; John Rosier has noted this in his IC column. To be fair, SLP peaked in February and has sold off. I don't know why, I'm not that familiar with the company. I have mentioned this before but my past experiences with resource companies has not been good so I stick with BRWM and the 7% (90% covered) dividend.

Are any of them still buys ? Certainly the big dividend payers are IMO. MKS has just had a decent uplift and good write-up by Cockney Rebel the other week. DLNM is also a quality retailer. And MNG is on my list but the big dividends don't start again until the end of Q1 2024 so some time to consider an entry point yet.

On the retailers, it certainly feels like MKS has joined NXT and DNLM as a quality operation. I bought a jacket from MKS this last week and was impressed by the online shopping experience plus the click and collect. The staff were helpful and there was a follow-up questionnaire by email. The only times most people fill in online questionnaires is when they get either a great service/product or a rubbish one! I completed the survey and marked the experience for a bloke who hates shopping as 8 out of 10. I'm not easy to please!

Here is that Cockney Rebel post a couple of weeks back. He thinks the shares could get to 50p on the back of re-ratings. https://tinyurl.com/2zut7rup

He suggests watching the July investor webcast. https://tinyurl.com/msx5ec2t
The IC also had an interesting write-up on the history of the last 20 years of CEOs at MKS. https://tinyurl.com/mr3c3bd4

I hope you continue to post on bargains, even just the odd post on this thread. It's clearly popular.

SSB

I’ll reply to ShoeShineBoy and Graham later, but for now just a bit more on the lack of follow up to articles here + a bit on Secure Trust Bank (LON:STB)

It’s not my imagination. 

e.g There was an excellent article from Roland Head on 31st October headed  “Hunting for cash-rich Companies.” There were only 10 replies to it, and only two of those ten included any further information. 

As I’ve posted on this thread, and previously on MW site,  it IS possible to invest successfully in bear markets like the current one if taking full advantage of the wide range of investment opportunities available to us, rather than just focusing on a narrow section of smaller companies, which is where the main interest is here. e.g around 7000 viewings each day and often 100 quality replies too for the daily small cap coverage. 

I’m keen on small companies too, but not to the exclusion of so many other attractive alternatives. Ditto blue sky. I’m not against them as punts but again can’t see ant sense in total focus only on blue sky/hope type shares. 

And right now there are a wide range of shares and Trusts at incredible bargain prices, available to those prepared to look beyond a narrow interest or just the UK instead of worldwide via the likes of Investment Trusts. 

I should have requested follow up alternative suggestions as there are many more beyond the few I covered.

One key BIG plus is that dividends are extraordinarily high thanks to the big share price falls, so however long we have to wait for the UK Market to wake up, there’s exceptional income available.

As for Secure Trust Bank (LON:STB) I rarely buy banks as it became obvious in the 2008 banking crisis that the Bank Directors themselves didn’t understand banks, so what hope for the rest of us. BUT Secure Trust Bank (LON:STB) just looks so cheap bearing in mind their confidence about profits in 2024, and PE of 3 and big dividend that should increase as profits increase with their 25% pay out target, it looked irresistible at £6 on a PE of 3.

Hi Ken. The post you refer to “below” is not showing. After “it is possible to win:-“ there is a blank box?? 

Hi Ken,
thanks for your response on my investment trust post. Good to see posts from Charles and others today. I think there is interest in investment trusts! Quite right too as discounts are at levels not seen in years. I will revert on that separately when I have time.
I'm stoked to see you post a "bargains" thread/comment! Again, I will revert as I'm keen to understand which of the options you mention below has done the best (dividends will complicate that calculation). And whether any are still buys.
SSB

Ken,

Thanks for your post. I've posted a reply on SSB's post yesterday to both of  you regarding these and other thoughts.

Gramwell.