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LLOYDS is going to FLY

lse:lloy

#3942

Bull and Bear cases for LLOY

Courtesy of Motley Fool. Pretty simplistic arguments. Make of them what you will.

https://www.fool.co.uk/investing/2020/02/10/lloyds-shares-buy-or-sell/

Cheers,

Frog in a tree


#3943

ETFs
Hi @PrefInvestor1, @J_Westlock

Thanks for the replies. It seems I may have left some room for misunderstanding so, in the hope of not confusing things even more.

VEVE simply because it’s reasonable size at $470m so not going to get ‘forgotten’, worldwide developed large & mid cap. Sounds fine, just a general risk I’m prepared to take in the context of the rest of my portfolio. Over 2000 holdings well split and it does seem to do what they say it’s trying to do. OCF according to Morningstar of 12bp, confirmed by Vanguard albeit 'transaction costs (buying/selling) on top but a relatively static portfolio. I prefer using Morningstar with a double check with the actual provider for this kind of data - it is what they do after all, providing exactly this kind of data to the ‘professionals’ - rather than HL, AJBell etc who make their money elsewhere; useful simple research tools especially if you have an account but I have, over the years, noticed so many errors in the data the brokers provide.

VEVE has no exposure to developing world but that’s fine, I’ll take that risk elsewhere with something (TBD) specific, no doubt at higher cost, but focused on exactly what I want. Don’t like that VEVE single biggest holding is Apple (think the SP reflects past growth rather than future growth with which they will struggle IMO) but, if you are buying into an index tracker, that’s what you get.

It wasn’t £100k new money, just the £6,000+ accrued dividends that were sitting in the account that got invested. The £100k is in a virtual portfolio (a spreadsheet) alongside £100k ATST and I’ll add more of each on dividend events etc. My SIPP is AJBell/Youinvest so £9.95 commission on both so going to ignore that but the stamp duty would be very real on the ATST whereas VEVE none so I’ll include stamp on any ATST ‘purchase’. No platform fees with AJBell for ITs or ETFs, they are just shares on the market so don’t need to adjust for that. Might take a while but we will see, true money in, money out performance.

And yes, well aware ATST doesn’t claim to be a tracker but the investment policy is large/medium cap worldwide, mainly developed world. By no means exactly the same holdings but huge overlap. And yes, 65bp costs they now say, down from the 89bp I’d previously seen I think because they have renegotiated fees with investment managers/advisors and got rid of their internal staff who had previously been doing that job. It’s still 50bp+ ‘more expensive’, so just want to see whether that extra is justified by them being able to pick - like I said previously, I can consistently beat the FTSE100 simply by avoiding the 40 to 50 constituents that appear to be dogs and going overweight elsewhere. Maybe they can do the same in which case the extra is worth paying for.

As for Monks, yes I’m well aware. But then their stated investment policy is significantly more aggressive and, consequently, involves more risk. SMT even more so. I’ve had both plus Witan, Scottish Investment, F&C - at one point that lot with ATST was all I had in my SIPP. I just let the dividends roll up to a reasonable size and then just bought whichever had the biggest discount to NAV. That was years ago when they were all very boring, before they decided to get more more active/aggressive. When they were all doing basically the same, the one with the lowest cost/highest discount was always the one to go for but very rarely worth swapping - that was a long time ago when ‘spare time’ didn’t really exist so get a simple plan that you don’t have to review too often seemed like a good idea.

The chart was straight from the horse’s mouth, the London Stock Exchange. I think you are right, not adjusted for corporate event (i.e. divs or, God forbid, Rights Issues etc) so, for a true performance guide, not ideal but the dividend yields on both are comparable and no other events so it shouldn’t make a huge difference. ATST does only distribute 85% to 95% of the dividends they receive so there is a small retained that should show up in the SP… but it is small.

Regards,
ITDYA


#3944

For the ‘Global’ sector funds, you might be interested in this table… ordered by Total Return (best at top).
I’ve now incorporated ATST into my tab.
Let me know if you find other ITs, Funds or ETFs that you think are worthwhile.

image

Personally, I prefer STS for the combination of yield and performance … but dependent on your circumstances you might also choose GBDV for pure yield… and MNKS for pure performance.

PS. Anything lower than GBDV in the table I certainly wouldn’t consider as the Total returns are not worth it… and they are no more resilient to market downturns as others… yet they are some of the most well traded funds for some reason.


#3945

I know this much loved donkey is stubborn but why is it well down compared to all the other banks which are showing healthy gains today? (constructive comments please rather than the normal!)


#3946

Which of the other banks you refer to are entirely dependent on the UK mortgage market and UK economy?

The euphoric December blip of the Tory Election win and “Brexit is done” moments are now seen for what they are… and we are back to reality… and that don’t look great.
Still who knows 20 years from now?


#3947

I’m just referring to today. RBS and Barclays generally track side-by-side with LLOY. HSBC is a different beast in itself and as for Virgin and Metro, well, they don’t conform to any pattern


#3948

Because it is still overpriced.

Simple

soi


#3949

Getting fed up of people using these threads on Lloyds for their own personal chat. I mean what does this have to do with Lloyds?


#3950

I agree there are a number of seriously negative people on here. I do wonder why they bother to post on a Lloyds forum.

Lets face it the SP hit 70p in the euphoria after the Tory election win and was 89p some 5+ years ago. Clearly markets do get it wrong.

This remains a company making around £6bn profit a year (albeit with little growth). It is NOT the basket case some make it out to be.


#3951

It is not


#3952

Wow… you don’t think that Lloyds is dependent on the UK mortgage market? Or the UK economy? Or GBP?

And you don’t think that removing the supposed threat of Labour with the Tory Election win created a bounce?
And then there was the January “Get Brexit Done” blip too with plenty on this board commenting on how these “unloved UK shares” were now going to take off.

You can’t have it both ways.


#3953

Hi @PHILKES,

I agree it’s not the basket case some may consider it, even if compared to certain other UKX stocks. LLOY is far from alone in disappointing holders. Not that long ago stocks like BT, CNA, ITV, VOD, all UK food retailers, et al, were regarded as value stocks with VG yields. Now they’ll most probably never recover their previous higher valuations.

Yes LLOY hit 70+ around the GE, but meaningless as intraday only. No consolidation. In fact it closed a few pence below 70 on that day.

Though I’m a LLOY holder, no denying there are too many headwinds facing UK’s economy & LLOY for now. For those looking for shorter-term gains, there are surely better opportunities elsewhere.

FWIW, I took VG gains here at 67+ in mid-Dec, as posted on another thread. I’ve re-added lower down since. I’m content to hold much longer-term if necessary, maybe just adding via DRIP shares & trade accordingly as opportunity grants again. But time is on my side.

OTOH, I also looked after my Mum’s LLOY ISA shares with another broker until recently. I sold the lot of her ISA at similar levels to my sells, ie. 67+, as I figured time probably wasn’t on my her side & I’d rather she had the money to spend & enjoy accordingly. That was the right call for her, despite a significant hit taken, as there’s no guarantee LLOY will be well above 70p again even a good while after 2020.

A simple chart can say so much. Previous strong resistance for LLOY at 73 is now down to 67+ at best, with even lower resistance levels over shorter timeframes. Little to be bullish about for the foreseeable future. - Regards.


#3954

BARC purposely left themselves as an ‘Atlantic bank’, I.e facing UK and USA rather than withdrawing into a UK-only shell like LLOY and RBS, a shell which became a trap and now looks doomed to at least another 10 years of retarded growth and general stagnation.

BARC should do better becaue it has that U.S. presence and still has the flexibility of an investment bank. Yet it doesn’t seem to be able to convert that into profits and the same old management are still there (talking up their American banking experience) instead of being thrown on the scrap heap.

RE: Remarks regarding a trade deal with the EU. My bet is that there will be something minimal, but basically a No Deal break and then it will be a sector by sector bun fight until something comprehensive is agreed in some kind of reasonable timescale - about 5-7 years. A lot of businesses, and maybe some whole sectors, wont survive that. A wary eye on LLOY’s loan book would seem prudent if my guess is right.

Some strange remarks from one or two people that seem to not understand the business of retail banking. If you really don’t, I suggest you research it before investing. If you think retail banking is a great business, well, its certainly an opinion. It is usually steady and generally will follow the success or otherwise of the region it serves.

I’d be looking to the States to research prospects in the sector myself or possibly Australia. Somewhere with growth and less than wafer thin (or even negative) interest rates. I wouldn’t be jumping in until the world bank et al stop forecasting lower global growth though.


#3955

Will be interesting what the EoY results will be like on 20th. More PPI provision? What other things are likely to come up?

I’m not expecting the SP to significantly rise over time but bounce around a certain range of around 10% which I hope to sell and buy (hopefully buy at the bottom and sell at the top but it doesn’t always work like that). I mainly bought for the divi as I have also done for VOD, SBRY and recently RDSB. I had 15K+ spare cash and it earns bugger all in the bank hence why investing ib shares. In the 3 or so years I’ve had shares I’ve made close on to £3K in divis and I’m up about 5% in holdings - mainly due to VOD where I lost about 15%. A big learning curve that one as has most of my buys/sells and advice from a number of you guys (thanks!).


#3956

Hi @skiking37,

A sound approach & not dissimilar from mine. As for your mentioned stocks that haven’t worked out (ie. VOD), you were far from alone in that debt-ridden mess. I ended up taking a significant calculated hit on VOD, something rare for me. But I’ve never regretted it. Got all my losses back & a bit more since in LLOY with one tranche bought at 52+, sold at 67+.

Here I’m neither bullish nor especially bearish for EoY results on this occasion. No surprise if we see a so-so report, be it with greater caution looking ahead.

Mindful of an ongoing Brexit-related downturn continuing across sectors of UK’s economy, I’d agree with Eadwig. Further rises in impairments & bad loans need watching. Any significant rise there may well see a return closer to recent lows, but that seems more likely later. One reason why I’ve no enthusiasm in adding more here for a while. My last add 56.78.

On the plus side, during recent wider sell-offs across the FTSE, LLOY kept support 56+. Also, whilst it’s not inconceivable we’ll see a further rise in PPI provisions, that’s bound to see closure soon. LLOY total PPI burden so far has been a huge £21.8 billion. That they could still increase their dividends recently speaks volumes for their underlying progress.

The huge fly in the ointment is, as the CEO clarified in November, that meeting their future targets is heavily reliant on an orderly Brexit. That’s far from a given. If we leave without a deal, LLOY seems likely to pay a heavy price well beyond 2020. So still plenty of uncertainty ahead, which unsurprisingly continues weighing down on the SP. - Regards.


#3957

No good looking at historical charts with Lloyd’s share price

Last 10 years not been normal times here, thanks to PPI and Brexit , CEO falling ill etc

Looking forward to exciting times over the next ten years with Lloyd’s Banking Group

Built up a nice nest egg now

She’s is one for everyone, and all should hold in their portfolio :slight_smile:


#3958

@regardless

Tee hee, you are right,

Tells you nothing… other than whatever bear trap, coyote pit, rabbit snare etc. that exists out there, they will consistently get caught!

As a small part of the income part of a much bigger portfolio where growth is anticipated elsewhere, yes, I can see some limited attractions in the Black Donkey. The yield is generous and the dividend not under significant risk in the immediate future IMO. Growth, that’s a completely different thing!

Regards,
ITDYA, hey a thoroughbred isn’t great for everything, sometimes you do need a mule.


#3959

Don’t know about you here

With all this flu going around … The world is ending hype, blah Blah Blah

Lloyd’s a few years back would be back in the 40s by now

Maybe finally she’s showing some resistance

Quarterly dividends soon folks :slight_smile:


#3960

??
Year ending:
31/12/2018
Revenue (£m)
22,091.00
Profit before tax (£m)
5,960.00


#3961

You need to deduct from declared profits the cost of buying back all the shares issued to employees and executive.
ATB
K