MGNS and/or VCT?

[Newroad]

Evening All.

I have a couple of possible changes to make for my P-HYP (pseudo-HYP). These would be caused by

SMDS (Industrials sector): Impending takeover by IP
GLEN (Basic Materials sector): Recent dividend reduction

As I currently operate, the next respective cabs off the rank from the FTSE 100 would be

SKG: Like-for-like, but seems fully priced (or DCC, slightly different, which is good, and only slightly lower yield according to Dividend Data: 3.46% vs 3.48%)
AAL: Subject to a takeover (battle?) and similarly seem fully priced

The other option would be to dip into the FTSE 250, which would instead give

MGNS: Quite different within their sector - I know quite a bit about them
VCT: Also quite different within their sector - I don't know much about them (Victrex)

Any thoughts on the companies in question and their current pricing?

Regards, Newroad

[kempiejon]

I sold my AAL just before the speculation, they've cut their dividend. There's a mining collective Blackrock World mining investment trust and at 5.5% interesting in the sector and you get holdings in AAl, GLEN et al. They, like quite a few miners have erratic income pay-outs.

SMDS I'm going to hold on for now. I think there's talk of an International Paper UK listing. I also hold Victrex, bought about 7 years ago, had a good income and growth history but the share price has declined over the past 5 years and dividend will be 59p, same as the year I bought it. There was a Covid stumble and a catch up special.

MGNS: Quite different within their sector - I know quite a bit about them

Nope not one I'm familiar with, good looking dividend growth over 5 years and at 4.8% yield seems better than SMDS.

[tjh290633]

I first bought AAL around 2010. They immediately stopped paying dividends but the price rose This allowed me to switch into BHP, which had fallen, at an effective yield higher than when I rejected them in favour of AAL.

Now we have this takeover approach. Had they not cancelled their dividend, I might now have been holding AAL instead of BHP, but would not have the spin-off holdings of South32 and Woodside.

It's a funny old world.

TJH

[BullDog]

Can't comment on Victrex really. But Morgan Sindall is a rare high quality company in a dire industry. A very good long term hold but not the bargain it was a few months ago.

[Newroad]

Morning, Terry.

You are right - and maybe I should just leave things. There are two separate considerations I suppose

GLEN: That no longer meets the yield requirements of the P-HYP, so I will sort anyway (indeed, I have already sold today). Not reinvested yet though.
SMDS: This one is trickier. There is a case for leaving, seeing if IP get a dual LSE listing and then what the dividend policy is with that. I may or may not do this (but see below).

Re SMDS, I currently have a "reverse" stop loss in place (rather perverse, I know). In short, I currently have a limit order to sell in at 373.6, which is what I would have sold at had I had a 10% trailing stop loss in from the start. It may never get there, but it's close (368.4 at time of writing).

I've got a formula now which calculates what SMDS should be worth based on the IP price and that of cable - which suggests 378.7. This is interesting - it further suggests that there is some chance of the deal falling apart (unless someone has a better explanation of the differential).

Regards, Newroad

[bluedonkey]

Can't comment on Victrex really. But Morgan Sindall is a rare high quality company in a dire industry. A very good long term hold but not the bargain it was a few months ago.

I agree as a long term holder since 2003, topped up 2009.

[tjh290633]

I first bought AAL around 2010. They immediately stopped paying dividends but the price rose This allowed me to switch into BHP, which had fallen, at an effective yield higher than when I rejected them in favour of AAL.

Now we have this takeover approach. Had they not cancelled their dividend, I might now have been holding AAL instead of BHP, but would not have the spin-off holdings of South32 and Woodside.

It's a funny old world.

TJH

Looking at my records I bought AAL in Oct 2008 at 1564p. They cancelled their dividends but by Feb 2010 they were at 2550p, so I sold and put the proceeds into BHP at 1995p, but taking into account the gain on AAL, this was reduced to 1282p, with a yield of 4.5%, rather than the actual 2.86%, by using the amount originally invested in AAL as the cost of BHP.

TJH.

[Newroad]

Morning All.

This story continues to be torturous (if only minor) story for me.

SMDS was creeping up to my "reverse stop loss" during morning trade yesterday - crossing the 370 barrier on the way to my 373.6 target - only to be disrupted by rumours of a bid for IP (International Paper) by Suzano on the US open

Cue some serious price action, though a fair bit recovered after a while.

https://www.msn.com/en-us/money/markets/international-paper-suzano-deal-seems-unlikely-analysts/ar-BB1lYJg8

Let's hope Seeking Alpha is correct above!

Regards, Newroad