DS Smith Trading Statement

[idpickering]

This stock used to feature in some HYPs, and may still, so this could be of interest here;

Trading Update

It has been an encouraging start to the year with trading in line with our expectations. We are delighted with the continuing strengthening of relationships and progress with our customers. This is being reflected in the strong demand for our enhanced packaging solutions across the business with the rate of like for like volume growth being well ahead of the comparative period last year. Progress with our pan-European and e-commerce customers was particularly strong again and the recovery of recent increases in paper prices is progressing as expected, with the impact of the short term recovery period continuing to be mitigated by operational leverage coming from the strong top-line growth.

https://www.investegate.co.uk/smith--ds ... 00037918P/

[Arborbridge]

This stock used to feature in some HYPs, and may still, so this could be of interest here;

Thanks, Ian. We still have it in the Arb's WYFHYP. I think it may have been a Luni idea, but it's done rather well since we bought it in 2014.

Arb.

[OZYU]

This stock used to feature in some HYPs, and may still, so this could be of interest here;

Thanks, Ian. We still have it in the Arb's WYFHYP. I think it may have been a Luni idea, but it's done rather well since we bought it in 2014.

Arb.

Yes, one of my long term favourites too, alongside MCRO and FOUR, among others..all very good divi 'increasers' with the sp performance to match. Might not be standard HYP stuff, but sensibly blended in among stalwarts elephants, does not half help my portfolio to shift its *ss, and keep bettering FTAS TR, my aim! After all if we had never heard of RDSB and GSK, and a few others of that ilk,we would be so much better off, but I suppose they in there and will stay out of habit, despite their long term IRRs being so much below portfolio IRR!

Just added to PFC this am, well I hope Luni it not watching, but this 'danger zone' 7% yield looks to me as if it could well hold, SFO or not, and be matched by good capital increase over a five year view, so I better live that long!( My wife preferred today to put another slice into Miton Multicap which has served her so well). We had to invest because despite our dislike of markets at present, our cash in the portfolios has busted our self imposed 10% limit.

Ozyu

PS 1 Very soon to be income takers from our portfolios (although with much of the portfolios in tax shelters income and capital gain are basically fungible imho), having been pot builders for decades, since about 1970 when we first concentrated on IT for years.
That is because I have finally accepted capital, offer too good to refuse this time (they try every year), for royalties (a good slice of our retirement income, but the capital will just go mostly to the grandkids since the royalty income will be replaced by divi income and or natural capital releases) I got for years for an AI package I wrote many years ago, and got a subsequent employer to burn in hardware in our robotics equipment.

PS 2 Arb, your XIRR problem looks like a data glitch to me.

[daveh]

This stock used to feature in some HYPs, and may still, so this could be of interest here;

Yes it still features in my HYP, yield is a bit low these days but it is my best performing share with a 725% gain and I have now received more back in dividend than I paid for the shares. First bought in September 2008, bought 5 further tranches through 2008 and 9 ( this was when I was investing £250 a month via Halifax sharebuilder). Reinvested dividends automatically up to 2010. I didn't take up the rights in 2012 (would have cost too much for me at the time) so let the rights lapse rather than tail swallow - the lapsed rights payment was almost as much as I paid for the shares.

I seem to have done a XIRR calc on the holding up to June , so must have commented on its performance recently, which shows a return of 35.4%pa - that at least makes up in a little way for Carrillion.

[Gengulphus]

I think it may have been a Luni idea, but it's done rather well since we bought it in 2014.

It's been in my HYP since early 2003. A bit of a 'slow burner' - spent the first 4 years fairly static, started to take off in 2007 but was caught by the financial crisis and had to halve its dividend in 2009, resulting in the share price falling to about a third of what I paid for mine. And it basically hasn't looked back since - it took four years (to 2013) to nearly double the dividend (i.e. nearly back to the 2008 level), it's nearly doubled the dividend again in the following four years, and the share price is currently around 10 times what it was in the depths of 2009. One of those shares about which I'm very happy not to have sold on the dividend cut!

Third best capital performer in my HYP, only beaten by 2nd-place Electrocomponents (first bought in 2007, another 2009 cutter, and even more of a 'slow burner', not really starting to take off until 2015) and 1st-place Halma (first bought in late 2003, and a rather more traditional HYP success story, with steady dividend progression and reasonably steady capital progression to go along with it). They're a 2-bagger, a 3-bagger and a 4-bagger respectively (in my portfolio, taking various top-up buys and top-slicing sells into account), so between them they basically make up for at least six total or near-total losers...

Please note that this is not a recommendation of any of those shares as current HYP buys - their current yields are too low for that! It's just meant as an illustration that no matter how much one aims to buy shares that will go on to become prototypical HYP success stories, one will get surprises - and they include good surprises as well as bad ones... Also possibly as a warning to beware of succumbing to pervasive doom & gloom, of which there was a massive amount in 2009: indeed, I think if I'd sold every one of my holdings that cut its dividend around then, I wouldn't have had a HYP left, because my portfolio would have been left too undiversified and with too short an average holding period to qualify! And that was one of the reasons I kept quite a high proportion of my dividend-cutters around then - and it hasn't worked out badly...

Gengulphus

[tjh290633]

One of my favourites as well. I'm always happy when I see their name on the back of a rugby shirt.

I first bought at 210p in Feb. 2007, and the intial yield was 4.1%, added in Oct. 2008 at 81p before the final was cut from 6.2p to 1.8p, almost by 75%, and the interim from 2.6p to 1.5p, rather more than Gengulphus's "halving" for the full year. Then I see that I trimmed back in Nov. 2010 at 189p, and also sold the nil-paid rights in Feb. 2012 before the final trimming back in July 2015 at 408p.

My XIRR comes out at 16.4%, although a single share held throughout would have given 11.2%. With double digit percentage increases in the dividend, it is not a share to get rid of. Currently the yield is about 3.1%, so not a new choice for an HYP, but a good one to have and to hold.

TJH

[Arborbridge]

Well, it looks like full marks for Smith's then! Shame about the yield but it has other qualities.....
I like the fact that it's a share that keeps it's head down, does the business, and doesn't ask me many questions!
A bit like RPC Group in that respect.

Oh, dear. I've just realised I might have also included IRV a until earlier this year in the gourp of trouble free shares.

Arb.

[Gengulphus]

... before the final was cut from 6.2p to 1.8p, almost by 75%, and the interim from 2.6p to 1.5p, rather more than Gengulphus's "halving" for the full year. ...

Dividends declared for the company's financial years:

Year ended 30/04/07: 2.6p interim + 6.0p final = 8.6p total
Year ended 30/04/08: 2.6p interim + 6.2p final = 8.8p total
Year ended 30/04/09: 2.6p interim + 1.8p final = 4.4p total
Year ended 30/04/10: 1.5p interim + 3.1p final = 4.6p total

I.e. the full-year dividend was halved in the year ended 30/04/09 - but the directors appear to have only decided that was necessary late in the year, after an unhalved interim had already been paid - so that year's final had to be cut by more in order to halve the total, then the next year's interim was cut roughly in line with the aimed-for halving of the total, and then that next year's final went up to roughly what it would have been cut to.

Your "rather more" comes from looking at dividends on a 'rolling historical' basis (i.e. most recent final plus most recent interim, whichever order they happen to be in), producing a 1.8p final + 1.5p interim = 3.3p 'rolling historical' total. That is in my view a distortion caused by dividend payment timing, as I see no signs that the directors ever intended a 62.5% cut rather than a 50% one. Encountering such distortions is one of the drawbacks of using 'rolling historical' dividends and yields...

Gengulphus

[Julian]

I held SMDS at one point but thought that I'd sold out. I did sell out in my non-tax-sheltered accounts (probably due to low yield and a drift towards income ITs) and was kicking myself a bit after reading this thread. Well, I've just had a quick look at my holdings and I see that I still hold it in my Sipp account.

It's one interesting (to me) aspect of holding my HYP across multiple accounts. I do tend to run different bits of it (ISA, Sipp and non-tax-sheltered) slightly differently. My Sipp account is closest to a very pure PYAD-ian no-tinker strategy hence the survival of my SMDS holding in there.

I'm pretty sure that my SMDS selloff in the non-tax-sheltered bit would have gone into income ITs since I am drifting in that direction so it would have been income-enhancing at the time and because of that I'm not really kicking myself too much but the discovery of the residual SMDS holding in my Sipp has brought a smile to my face today. Just another silly little emotional moment in my HYP adventures today that reminds me that, unless one is a dispassionate calculating machine who can suppress all emotion, there are moments when there is more to this HYP investing lark than just the numbers.

- Julian