What's going on at Tate & Lyle?

[Bouleversee]

Another great buying opportunity for those who are wedded to strategic ignorance and high yields and to hell with the capital loss:

I've just noticed that the share price of Tate & Lyle has dropped 30.45% in the past year and now offers a yield of 5.18%. Isn't this cropping up in anyone's HYPTUSS? I'm actually rather tempted to gift the remaining certificated shares I hold to my grandchildren while the price is low (need to get rid of some dividend income in view of next year's tax changes) and buy more in my ISA. However, I have never been able to blindly swallow the s.i. bit and like to understand why the s.p. has fallen and whether the downward trajectory is likely to continue or be reversed. I know we have this big anti-sugar thing going on but T&L no longer sell sugar (they've just sold the name to someone else which I think is potty) and are now into alternative products for the food manufacturers; don't ask me to remember their names. So why the s.p. fall?

I know TJH was a holder. What are your views, Terry, or anyone else? Falling Knife or recovery prospect? I have been getting nice, fat divs. from them so hadn't noticed the unmentionable aspect but I can't pretend it doesn't matter.

[eyeball08]

Not doing sugar anymore?
I might not have been listening carefully enough but I thought I heard someone on radio 4 this morning talking about Tate and Lyle offloading tons of sugar cane at its own jetty in the Thames estuary somewhere. I think the gist was Brexit maybe good for this import being cheaper but bad for the sugar beet farmers of East Anglia who compete with this product.

[eyeball08]

Like you I have also been wondering about the significant share price decline but am trying not to look too often.

[monabri]

https://www.tateandlyle.com/what-we-do

They divested the sugar business in 2012.

https://www.google.co.uk/url?sa=t&sourc ... UtcL5fLrZI

[tjh290633]

They languish at No.5 in my top up rankings. That yield is actually just one spot above my median yield.

If the entrails of your chicken say "buy", then buy.

TJH

[Bouleversee]

The sale included the rights to the brand names Tate & Lyle and Lyle Golden Syrup.

So we are to have a new CEO. What is known about Nick Hampton? I could google him but that probably wouldn't tell me much about how good he is.

TJH: My chicken is getting rather old. I don't trust its entrails any more.

[Arborbridge]

Another great buying opportunity for those who are wedded to strategic ignorance and high yields and to hell with the capital loss:

I've just noticed that the share price of Tate & Lyle has dropped 30.45% in the past year and now offers a yield of 5.18%. Isn't this cropping up in anyone's HYPTUSS?

This is weird. I really hadn't noticed but Tate has leapt from being 35th in my table in December to 13th now! Shows how unobservant I am, but yes, it is yielding slightly more than my last purchase in 2015. In fact higher than anytime apart from the 2008-2009 period.

As I commented elsewhere, we will soon be spoilt for choice - if we aren't already.

[Arborbridge]

They languish at No.5 in my top up rankings. That yield is actually just one spot above my median yield.

If the entrails of your chicken say "buy", then buy.

TJH

Languish? I would have thought No 5 quite a high position - and Tate must have climbed in the that position quite rapidly over the past month or so.

Arb.

[Bouleversee]

The sale included the rights to the brand names Tate & Lyle and Lyle Golden Syrup.

So we are to have a new CEO. What is known about Nick Hampton? I could google him but that probably wouldn't tell me much about how good he is.

TJH: My chicken is getting rather old. I don't trust its entrails any more.

P.S. Very strange, the rest of my post has disappeared. I added that my intellect tells me that now govt. edict compels the reduction of sugar content, a manufacturer of artificial or alternative sweeteners should do well. However, I have never been quite sure about their high fructose corn syrup, Is that good or bad? I suppose I should sit on my hands till we see how the new chap shapes up. There seems to be a big turnover in company bosses at the moment.

[CommissarJones]

So why the s.p. fall?

My guess would be adverse currency movements, specifically the weak dollar. That hurts because the U.S. accounts for a sizeable share of TATE's sales and profit. The U.S. Dollar Index touched the lowest level since 2014 in February, but subsequently ended the month higher, the first monthly gain since October.

[idpickering]

For whatever it's worth, and very much for the items discussed so far in this thread, and the static dividend for three years, resulted in me dropping my holdings in TATE last week, as I mentioned in another thread. I'm in no rush to buy back into them either.

Ian.

[vrdiver]

I bought TATE in April '07, and currently they are under water on a capital basis, just making it into positive territory with a 3.5% XIRR when dividends are included.

Their dividend CAGR has been 0.7%, 2.3% and 2.6% over 1, 5 and 10 years, so underwhelming there as well.

Regardless of HYPTUS top-up position (13 in mine) I won't be throwing more cash at them until they change something fundamental, as their current business model does no better than to limp along. The sale of the brand name and the move to artificial sweeteners could have been a turning point, but it coincides with a pretty much frozen dividend, so doesn't look like a great strategic change in direction.

A new CEO might be just the thing to kick-start the company again: I hope so, but won't be holding my breath!

VRD

[Bouleversee]

So why the s.p. fall?

My guess would be adverse currency movements, specifically the weak dollar. That hurts because the U.S. accounts for a sizeable share of TATE's sales and profit. The U.S. Dollar Index touched the lowest level since 2014 in February, but subsequently ended the month higher, the first monthly gain since October.

Thanks; I should have thought of that. What effect is the increase in US interest rates likely to have, if any?

[Bouleversee]

For whatever it's worth, and very much for the items discussed so far in this thread, and the static dividend for three years, resulted in me dropping my holdings in TATE last week, as I mentioned in another thread. I'm in no rush to buy back into them either.

Ian.

That doesn't sound like strategic ignorance, Ian. Which thread was that? I'd like to understand your rationale for selling at this point, having sustained the capital loss and now due to get a high yield on current price. I presume you have matched that elsewhere but would like to know where. Perhaps that's the dosh going into Lloyds?

I gave a chunk of mine to my grandchildren some years ago so I haven't achieved much there, though the dividends still seem pretty good in relation to my purchase costs many years ago but that's not a HYP way of looking at it, I know.

[kempiejon]

Ian's TATE post and my reply viewtopic.php?f=15&t=10494&p=125568&hilit=tate#p125568

I actually dumped Tate & Lyle due to the static div for years now, and also Pennon Group, as I was nervous of them, and both of these were from the lower index. I want reliable shares, that are going to pay me good increases of dividend, and a good yield too, preferably from the upper index. I mentioned that I'd like to bring AV. back into the fold, so I bit the bullet and went for it. So 28 shares in my HYP.

Ian,

Just shows how it takes all types to make a market, in my ISA TATE is booked for my next purchase at the end of the month to mop up some dividends. You might be right about size and quality but they have just nudged the interim up after 3 years of static dividends. During those 3 years I have excluded them from top ups and I see the yield has also popped up above 5% for I think the first time since 2015.

[Bouleversee]

Thanks, Kempiejon. As you suggest, there wouldn't be a market if we all thought and acted in the same way and it's all a gamble. For my part, I have over the years always done best with the smaller companies and special situations, with one or two exceptions. A lot of the bigger ones seem to have lost their way in recent years but times change as well as CEOs so who knows what will happen with any of them?

[micrographia]

I'm certainly not considering dumping TATE and in fact will likely top up in a couple of weeks time. I first bought in 2007 and again a couple of years later on a 9% yield when the market was saying it was a basket case. Value is up more than 150% on my average purchase price and it's paid a static or rising dividend every year I've held it - it's just paid an increased interim. Not fussed that they shed their sugar business - it was clear that a war on sugar was on the cards, at the time it was hamstrung by the EU tariffs on sugar imports and Brexit was barely a twinkle in UKIP supporters ageing eyes.

Seriously, if 12 months ago you'd pointed out a company yielding above 5% with the divi covered 2x, no history of divi cuts and a prospect of renewed divi growth many here would have had your hand off .

EEM

[idpickering]

For whatever it's worth, and very much for the items discussed so far in this thread, and the static dividend for three years, resulted in me dropping my holdings in TATE last week, as I mentioned in another thread. I'm in no rush to buy back into them either.

Ian.

That doesn't sound like strategic ignorance, Ian. Which thread was that? I'd like to understand your rationale for selling at this point, having sustained the capital loss and now due to get a high yield on current price. I presume you have matched that elsewhere but would like to know where. Perhaps that's the dosh going into Lloyds?

I gave a chunk of mine to my grandchildren some years ago so I haven't achieved much there, though the dividends still seem pretty good in relation to my purchase costs many years ago but that's not a HYP way of looking at it, I know.

Hi Bouleversee. I see Kempijon found a link to my post regarding dumping TATE, so my thanks to him. I do get what you're saying Bouleversee, and I did go against the 'strategic ignorance' aspect of the HYP sport, and my reasons for dropping them are in that post. That money was invested in Aviva immediately.

Ian.

[Bouleversee]

Thanks, Ian. Hope that works out well for you in the long run. I hold Aviva as well as Tate.

[idpickering]

Thanks, Ian. Hope that works out well for you in the long run. I hold Aviva as well as Tate.

You're welcome Bouleversee. Same to you. I'm all for Strategic Ignorance ordinarily, but I think that sometimes one has to bite the bullet and make a decision.

Ian.