Menu
Close

Slight surprise that no comments on price collapse here?

lse:vod

#1

So much for a top yielder with decent fundamentals like VOD, as often portrayed by many, being a likely strong defensive stock if Brexit uncertainties mounted. Just over 168 as I write & still falling. Hindsight is easy, but recent big director selling was an obvious warning of worse to come. Until the downtrend bottoms out & we recover, even VOD dividends seem fairly scant consolation.

But notwithstanding my huge disappointment here as I hold 2 tranches of real shares & 5 leveraged long positions, so a sizeable investment overall (all posted in separate thread here), I’ll be doggedly holding on come what may. No selling at loss.

That may seem like nothing more than ill-considered bravado. Easy to knock it. But it’s how I’ve prospered with real shares over time. I’m talking years. It’s all I know when fundamentals seem totally ignored by markets due to uncontrollable macro-factors & bearish sentiment predominates. - I stick to my time-honoured trading philosophy.

Indeed, I’ve called it badly wrong before. I had to sit doggedly with stocks like MRW, EMG, et al, picking up yield, ignoring uber-bear negativity, to eventually come away with VG profits overall. My at one point truly awful positions with such stocks are recorded on respective BBs histories.

As many know, summer months typically see less activity from bigger investment funds. Many pros stay away until September. Hence the old adage, “Sell in May & go away”. Much lower volumes seen for most stocks. So it doesn’t take huge selling to see SPs continue falling. FWIW, VOD’s current daily average is over 65m. Recent volumes since losing 175+ support here are well below average.

So when in a mess, I fall back on what’s worked for me over time, accepting that things may get even worse before they improve substantially. Which they will do over time, especially after Brexit uncertainties are no longer weighing down on certain sectors in UK markets.

This game, for all the potential rewards when things go our way, is never easy. - JD just reflecting on things from a longer-term perspective. - GLA.


#2

I topped up 2000 shares yesterday @ 172.49 (173.86 with costs) and I thought I had a bargain! Look at it now despite the positive RNS regarding Australia. Like you will hold on.

Best regards @ValueSeeker8


#3

baml downgrade buy to neutral pt 202 from about 250 I think,


#4

Hi @jackdawsson, yes guessing its the BofA analyst downgrade thats done the damage ?. Anyway I just bought some more at just under 168 to bring my average down to 187.x - wow thats almost the price when I last averaged down (185) !. I have obviously bought too soon as I see its dropped to 166.x now :frowning:. Your strategy worked well enough with BT lets hope for positive things here. I’m not aware of any business related bad news, the Australia deal today sounds positive.

ATB

Pref


#5

Don’t think there’s any particular bad news out there for VOD but there are plenty of risks… even Brexit 'til its sorted has some downward impact on SP wrt potential network design issues in moving move data freely between the UK and EU states.

After the last not great results all eyes will be on the November set for the half-year Apr-Sept period… can’t see the SP moving around much until then.

The recent VHA / TPG merger doesn’t appear to have had any impact one way or other but only 25.05% will be owed by VOD anyway.


#6

Hi Pref,

Thanks. It’s probably a factor, but the extent of the selling still seems an overreaction based on that & not at all counter-balanced by today’s merger news, granted that the full benefits of latter won’t be realised until next year.

Probably a few things undermining investor confidence here & some are undoubtedly sector-related. Also, for example, more forecast rate rises, their effect on debt levels, doubts about future growth, change of CEO in October, increasing Brexit uncertainties, etc. all coming together.

Though a yield approaching 8% is more than decent, we know that by itself can mean little as CNA holders found out recently when their yield went well above 8% & CNA’s SP continued dropping.

Don’t get me wrong. I’ll be true to what I know works well for me from experience as stated in my opening post. For me, VOD is a firm hold. But as I’m thousands of pounds down here, including said leveraged positions, neither will I be averaging down. - Regards.


#7

Well the Australian merger went down well there it would seem, shares surged by 44%, see link below. Hopefully that will have done Vodafone group some good…

https://www.investsmart.com.au/shares/asx-hta/hutchison-telecommunications-australia-limited/financials

Pref


#8

@NewBill1703, Hi Bill, guessing you have been watching todays events wrt Vodafone ?, and no doubt counting the cost in respect of your own portfolio… Any comments regarding the cause and where we might go from here ?. Appreciate your insight.

Best Regards

Pref


#9

Hi All, found the following article which covers today’s downgrade:-

https://m.benzinga.com/article/12283724?utm_referrer=https%3A%2F%2Fwww.google.co.uk%2F

The analyst concerned set a revised price target of $202 (thats 1.55ish, gulp). But then looking at his record he has had several previous goes at rating Vodafone with a success rate of 0 out of 3 !. Anyway I see Simply Wall Street still reckon the company is worth well over 200p FWIW. Stock down 4.79% in the US tonight, but then it was a down day there for a change…

ATB

Pref


#10

Hi Again All, just by way of interest I see that IG reckon that 98% of their customer accounts are long Vodafone. And I checked for short positions on https://shorttracker.co.uk/ and nothing was shown.

Confess I am expecting some more downside at the open today after yesterday’s falls in the US, but hey maybe that won’t happen.

ATB

Pref


#11

Added to my VOD today at 167p. My avg cost now down to 207p but the divvies have helped a lot over the years. It will come back.


#12

Well VOD did OK this morning, regained the opening price by around 13:00 and I had hopes of seeing some upside. But during the afternoon the FTSE went to rats and we ended up another 3p down at 164.5.

Just knew I’d bought too soon at 168, but if I’d held off it would probably be back up at 170+ by now. Nothings easy in this game is it !.

Pref


#13

Nursing a nice loss also, with an average of 196. Never thought this would go below 180.

Will continue to leave it for dividends, lets just hope it doesn’t get slashed in 2019.


#14

@Lastemporer, Wow you beat me! my average is 196.55p but the dividends I got covers all the capital loss and more. My last top up should add another £270 to the annual dividends I receive, so can’t really complain too much about VOD. As for the SP, sooner or later it will come back.


#15

Hi @ValueSeeker8 and @Lastemporer, well my average is 187 now - but that includes ALL dividends received. So 23p down now with annual dividends of 13.5 that’s 2 years worth of dividends… Just hoping it doesn’t go to 155 as per that bofa analysts price target!.

ATB

Pref


#16

Hi Pref et al - I remain somewhat bemused by VOD’s struggles in the market. What has really changed?.. They are generating more FCF than ever before, the dividend is now covered, and the Liberty deal looks like a good one, with the prospect of significant synergies. Corporate action in both India and Australia looks proactive and positive in terms of positioning in those markets.

The best I can deduce is that the market has a big issue over the balance sheet, which neither the company nor the rating agencies appear to share (nor me, FWIW). Whatever… c’est la vie, particularly in these, fragile and febrile markets. I will not be selling here… and can’t imagine what would prompt me so to do.

VOD is a core, but not huge position in my portfolio so counting the cost of it isn’t too painful - and more than made up by happier events over at WTB. What you lose on the swings… etc, etc. Enjoying a particularly pleasant cup of coffee this morning!


#17

“Vodafone has an Altman Z2 of -2.17 indicating a serious risk of financial distress within the next 2 years.”

I guess many overlook these metrics when buying shares and are hopeful the share will go up. Countrywide, Carpertright and Mothercare also had similar Z Scores.


#18

@NewBill1703 - The CE is leaving after a decade in the job and being replaced with someone less experienced, the divi isn’t covered if you use the normal calculation (and I note that investors and companies use another formula only when the usual shows as uncovered)… and total revenue was down.
That’s why it will be important to hear good news in November for the half-year results.
It hasn’t crashed… just nothing great has happened in 2018 thus far… remains a Buy for the long term IMHO though.


#19

@IAmShareCrazy, the following is an extract from VOD annual report published in 01/06:


As you can see clearly from the above table VOD effectively writes off 11 bn Euros from its annual earnings to account for: ( Depreciation, Amortisation and loss on disposal of fixed assets + Amortisation of acquired customer based and brand intangible assets). These are, by in large, non-cash transactions that are set against Vodafone’s massive 145 bn Euro infrastructure but they are an accounting necessity that must be included in the financial statement(s). And this has been going on since ….well, since there was a Vodafone! Does Altman’s Z2 score take that into account? Does this really looks like a company which is going to be in a financial distress within 2 years!? Can you really put Vodafone in the same league as Countrywide, Carpet-right and Mother-care!? How could you!? How many companies do you know that have 700m customers worldwide paying monthly/annually or whatever for its services?

Best Regards @ValueSeeker8


#20

Rose tinted glasses. Price has fallen from 240 to 160. They thought the Titanic would never sink!