HYP Today

[Walrus]

If you could pick one HYP share today which one would it be? It feels a bit like everyone of them has it's issues, and my Income PF is starting to look a little like a dogs of the FTSE portfolio

IMB 4%
BAT 1%
VOD 4%
BP 4%
Shell 4%
Lloyds 3%
Unilever 2%
HSBC 3%
Diageo 3%
Legal and General 3%
Direct Line 1%
National Grid 6%
SSE 2 %
United Utilities 4%
Petrofac 2%
BRCI 4%
Income Trusts yielding above 4.3% 50%

[idpickering]

If you could pick one HYP share today which one would it be? It feels a bit like everyone of them has it's issues, and my Income PF is starting to look a little like a dogs of the FTSE portfolio

IMB 4%
BAT 1%
VOD 4%
BP 4%
Shell 4%
Lloyds 3%
Unilever 2%
HSBC 3%
Diageo 3%
Legal and General 3%
Direct Line 1%
National Grid 6%
SSE 2 %
United Utilities 4%
Petrofac 2%
BRCI 4%
Income Trusts yielding above 4.3% 50%

If you're asking which one of the list you've put up there then I'd pick BATS. They're down 9.5% as I type, and IMHO are a bargain for purchase and a long term hold. Today they would be my choice outside of your list too.

Ian.

[Dod101]

Hi Walrus. I quickly worked out that percentages must be your holding. I thought at first it was going to be the current yields. In your case, I would top up HSBC or if you are feeling really brave, BAT.

I agree with your general sentiments though and certainly HYP shares are becoming ever more difficult to find. Utilities are more or less out, HSBC, Shell and Glaxo have not increased their dividends for some years, and Vodafone has a big question mark over it. We are left with the insurers, Direct Line, Admiral and Legal and General and probably Lloyds and Schroders N/V. Unilever and Diageo are fine but not really traditional HYP shares.

We have discussed the tobaccos and if buying today they are surely worth looking at although in the longer term who knows?

Dod

[Walrus]

Hi Walrus. I quickly worked out that percentages must be your holding. I thought at first it was going to be the current yields. In your case, I would top up HSBC or if you are feeling really brave, BAT.

I agree with your general sentiments though and certainly HYP shares are becoming ever more difficult to find. Utilities are more or less out, HSBC, Shell and Glaxo have not increased their dividends for some years, and Vodafone has a big question mark over it. We are left with the insurers, Direct Line, Admiral and Legal and General and probably Lloyds and Schroders N/V. Unilever and Diageo are fine but not really traditional HYP shares.

We have discussed the tobaccos and if buying today they are surely worth looking at although in the longer term who knows?

Dod

I guess as I made my first purchase of BATs today, which was somewhat unplanned I was just looking for a spot of objectivity. It could be that now is a great time to be buying income. Many household name bluechip shares yielding over 6 percent, or these could be these companies are one massive value trap which I'm nervous about

I meant to reply to one of TJH posts but I couldn't find the post where he kindly posted some historic yields from his HYPing. What I took from it was that National Grid looked cheap based on historic grounds, but I'm at my max on that already. I do like Legal and General and I like the banks as I have alluded too previously, Lloyds particularly. If Prudential falls much further it may find a home also, I know currently off topic but it's getting there.

Current plan is just to keep picking off things on falls like today but I'm wary of creating a portfolio of dogs.

[Dod101]

For what it is worth I think you are absolutely right to be wary but for instance tobacco profits look good in the medium term at least but we all have to recognise that their basic product is in a declining market. Who knows whether vaping in all its forms will be able to take up the loss in the tobacco side either in volume or more importantly in profit. The current profits in tobacco are of course helped by there being no advertising or promotional costs nor any need for particularly big capex. As a new buy and maybe as a top up BAT and Imps look pretty tempting I think but I worry how easy it is for 8% or 9% to be wiped off the share price. It is not often that that happens unless for a profit warning and such drops need I think to be treated with great caution.

I should have added to my candidates Astra Zeneca which is looking good at the moment I think.

Dod

[monabri]

Just to recall AZN ...July 26 2017 at 5113p, closing at 4325p on July 27th. It actually fell even further during the day....a result of a failed trial ( drug "Mystic"). From memory it was close to a 16% fall in one day at one point.

And now AZN seems to be a stockmarket fave!

https://www.cnbc.com/2017/07/27/astraze ... study.html

[monabri]

From memory it was close to a 16% fall in one day at one point.

16.3% (4278.4p) my records show (I bought a small tranche)

[moorfield]

If you could pick one HYP share today which one would it be?

Cash is a position too. I'm rather enjoying watching the market moves from the sidelines, my portfolio has already delivered the income I've asked of it for 2018, so I'm not planning any more buying or selling until Q1 next year. I could be tempted though if the meterorite that is a no-deal Brexit and about to hit the ocean sends a yield tsunami our way ...

(Edit: in which case my first choice would probably be Shell RDSB.)

[MaraMan]

I would probably go for Unilever or Legal & General, or NG, or maybe HSBC But if I had to pick just one it would be Unilever.

I know that there are several tobacconistas on these boards, but I think the writing has been on the wall for these for some time, and when I have said so it doesn't go down well. Oil co's face a similar future but with a much slower decline. I think a storm is coming for likes of Direct Line. I don't like the way United utilites nor SSE are run.

[Dod101]

I would probably go for Unilever or Legal & General, or NG, or maybe HSBC But if I had to pick just one it would be Unilever.

I know that there are several tobacconistas on these boards, but I think the writing has been on the wall for these for some time, and when I have said so it doesn't go down well. Oil co's face a similar future but with a much slower decline. I think a storm is coming for likes of Direct Line. I don't like the way United utilites nor SSE are run.

I agree with your comments but why Direct Line? I do not hold but they seem to be a reasonably well run general insurer and problems are in the nature of their business.

Dod

[MaraMan]

I mentioned Direct Line as they rely to much greater degree on Home and Motor insurance than L&G. I think the same applies to all insurers in that market. The FCA has, rightly so, got them in its sights over pricing etc. https://www.ft.com/content/09619e3e-c30 ... 197280d3f7

and https://www.citizensadvice.org.uk/about ... on-a-year/

[monabri]

Where are more and more people doing their shopping...Aldi & Lidl. They tend to stock their own brand products ('Norpak' margerine for example). People are going to be tempted to give these own brands a try... they are a heck of a lot cheaper than Unilever ( and RB) products. There are also quite a few programs on TV which encourage people to look at own brands ( saving enough to go on holiday or save up for a house deposit). So I can see a reason not to buy Unilever.

[MaraMan]

I could come up with a reason not to buy the shares of any company without too much difficulty. I take the Aldi and Lidl point, but I think big brands will retain their global profile for a very long time.

[TUK020]

If you could pick one HYP share today which one would it be? It feels a bit like everyone of them has it's issues, and my Income PF is starting to look a little like a dogs of the FTSE portfolio

IMB 4%
BAT 1%
VOD 4%
BP 4%
Shell 4%
Lloyds 3%
Unilever 2%
HSBC 3%
Diageo 3%
Legal and General 3%
Direct Line 1%
National Grid 6%
SSE 2 %
United Utilities 4%
Petrofac 2%
BRCI 4%
Income Trusts yielding above 4.3% 50%

The ones that feel oversold at the moment are BATS, IMB, VOD, NG.
VOD are a little unnerving, as it is not clear how much capex needs to be spent to maintain revenue and this what is left over for shareholders.
BATS look to be the deal of the day.
If I had to pick just one, I would probably opt for NG. as the least exciting decision.
Given your portfolio weightings, I would probably go for BATS
tuk020

[Dod101]

I mentioned Direct Line as they rely to much greater degree on Home and Motor insurance than L&G. I think the same applies to all insurers in that market. /

I see what you mean but Direct Line is no way comparable to Legal and General. They are chalk and cheese, the one being in short term Household and motor and the other primarily very long term life insurance and fund management. They might as well be in different sectors (and ought to be I think) The nearest comparator to Direct Line is I think Admiral.

I hold Legal & General and also Admiral. Admiral because they have a highly profitable tie up with Munich Re.
Dod

[MaraMan]

I think I said that L&G and Direct Line aren't comparable (or at least meant to say), so we agree!

I also think that normally they aren't a bad company to invest in, but the fall out from the super-complaint may hit them hard so I wouldn't buy at the moment.

I won't use them again though after car insurance claim that was handled with almost comic levels of incompetance.

I hold L&G (for their asset mgmnt business) but not Direct Line.

[Arborbridge]

Oh dear: it's Black Mood Monday. We really are talking ourselves into depression. Nothing is safe, the sky is falling in - every sector has some question over it, mostly caused by what a tiny bit just half the nation voted for - not even knowing what the terms would be. That implied a cost and that is why the market has fallen. True there are other specific issues - like oil running out, and fears about tobacco - but they are hardly new.

Frankly, I'm surprised the market has held up so well. Like everyone I feel it's galling that our favourite shares have been hit disproportionately hard, but isn't this what we want? - savage cuts to prices?


Arb.

[moorfield]

BATS look to be the deal of the day.

Actually of my holdings BATS has moved the most relative to my benchmark yield (CTY) since the start of the year, from 0.9x then to 1.4x today. So I will change my mind from RDSB.

Is it really down 10% at close ?

[moorfield]

Oh dear: it's Black Mood Monday. We really are talking ourselves into depression.

Perhaps a few incantations of "Strategic Ignorance" in a darkened room will soothe the chakras ?

[Arborbridge]

Oh dear: it's Black Mood Monday. We really are talking ourselves into depression.

Perhaps a few incantations of "Strategic Ignorance" in a darkened room will soothe the chakras ?

Sounds about right!


Arb.