Potential August topups

[Arborbridge]

Here's the top twelve of my table in my usual format ranked in HYPTUSS order:-



This would be my first topup since April, and owing to the market falls, there are some extraordinary yields on offer - even at lower points of this list. The sweetshop is well and truly open with too many delights available.

Persimmon is possible, though an economic topup would push it over the 5% income limit.
All the others are valid choices so it's open season on any one of the top group - though I may decide to sit out another month.

Arb.

[idpickering]

Here's the top twelve of my table in my usual format ranked in HYPTUSS order:-



This would be my first topup since April, and owing to the market falls, there are some extraordinary yields on offer - even at lower points of this list. The sweetshop is well and truly open with too many delights available.

Persimmon is possible, though an economic topup would push it over the 5% income limit.
All the others are valid choices so it's open season on any one of the top group - though I may decide to sit out another month.

Arb.

Hi Arb, yes there are certainly some nice yields about currently. I dropped Persimmon recently and replaced it with Phoenix Group, ditto with Sainsbury’s for Smith DS. Of your list I’d favour Imperial Brands for a top up. PSN were removed as I had Taylor Wimpey alongside it in the sector and I’d lost faith in PSN. SBRY because retail is not the place to invest imho, and SMDS for added diversification. I’m happier with my HYP now so it’s hands off going forward.

Ian.

[jackdaww]

lloyds at around 50p looks very tempting .

any thoughts welcome please .

[idpickering]

lloyds at around 50p looks very tempting .

any thoughts welcome please .

That would've been my secondary suggestion tbh. For me, I've spent enough on Lloyd's in my HYP, so a hold.

Ian.

[Arborbridge]

Hi Arb, yes there are certainly some nice yields about currently. I dropped Persimmon recently and replaced it with Phoenix Group, ditto with Sainsbury’s for Smith DS. Of your list I’d favour Imperial Brands for a top up. PSN were removed as I had Taylor Wimpey alongside it in the sector and I’d lost faith in PSN. SBRY because retail is not the place to invest imho, and SMDS for added diversification. I’m happier with my HYP now so it’s hands off going forward.

Ian.

Thanks Ian. I'm not sure what to do, TBH, as there's quite a good choice. If I just stick to the routine, ruling out PSN for the reason given earlier, that leaves BT at the top. I note TJH topped up BT, but isn't there a strong suggestiong that the new CEO will slash the dividend? I know we shouldn't second guess, but since there are other valid choices it could make sense to back off.

SLA and AV. are next and I see no valid reason not to top up one of them AV. being slightly favourite on cover grounds. SLA isn't in the cheap dealing account, so there's no hurry for this weekend.

Lloyds I'll have a think about. It has strong cover, but I've already sunk a big chunk over the years - 4.25% of capital - with little reward.

The rest are all so-so. Even SBRY which has good cover and modest yield suggesting the market isn't too worried. However, being a recent cutter, it would be ruled out. IMB is a strong contenter.

At the bottom is BLND, which is quite tempting having been particularly knocked on Brexit and retail fears.

At present, I've stuck a buy on AV. but since it's the weekend, I have time to think about this more and alter the buy if I change my mind. Of course, there are equally tempting ITs on offer, and I can only afford two economic topups from this particular account (my SIPP).

Arb.

[Arborbridge]

lloyds at around 50p looks very tempting .

any thoughts welcome please .

I would strongly consider Lloyds in your shoes, provided you are not in my position of having put quite a bit in there already.

[Dod101]

These are quite astonishing yields, but I would go for Chesnara at a mere 6.8%. I have decided personally not to add to my two tobacco shares or Imperial Brands would be my first choice.

Dod

[jackdaww]

lloyds at around 50p looks very tempting .

any thoughts welcome please .

I would strongly consider Lloyds in your shoes, provided you are not in my position of having put quite a bit in there already.

============================================

i have zero lloyds at present , what would other pros and cons be , apart from obvious size and yield ?

[richfool]

Berenberg's view on Lloyds:

Berenberg cuts Lloyds's target price, points out exposures to consumer credit ...............
past actions by the lender to prop up interest margins had made it more vulnerable than peers to cyclical headwinds for its revenues and loan losses.

https://www.sharecast.com/news/broker-r ... 94566.html

https://www.hl.co.uk/shares/share-resea ... mer-credit

I continue to avoid domestically focused banks whilst Brexit uncertainties exist.

[jackdaww]

Berenberg's view on Lloyds:

Berenberg cuts Lloyds's target price, points out exposures to consumer credit ...............
past actions by the lender to prop up interest margins had made it more vulnerable than peers to cyclical headwinds for its revenues and loan losses.

https://www.sharecast.com/news/broker-r ... 94566.html

https://www.hl.co.uk/shares/share-resea ... mer-credit

I continue to avoid domestically focused banks whilst Brexit uncertainties exist.

===============================

how about HSBC ?

[idpickering]

how about HSBC ?

I hedge my bets between them by holding both banks, equally weighted in my HYP.

Ian

[Arborbridge]

lloyds at around 50p looks very tempting .

any thoughts welcome please .

I would strongly consider Lloyds in your shoes, provided you are not in my position of having put quite a bit in there already.

============================================

i have zero lloyds at present , what would other pros and cons be , apart from obvious size and yield ?

There will always be downsides which people point out - see richfool's post. Not long ago, the fact that Lloyds was domestically focussed was touted as an advantage - so fashions and risks change. However, amongst the advantages are the fact that is been through the considerable pain of reconstruction and one would think is now a more resilient organisation. It apparently has a well covered and sustainable dividend. However, if all was well, it's a puzzle why the share price continues to languish. The B word may be the answer, so like all stocks there are risks.
Some investors avoid banks like the plague, but if we won't some diversity, they are difficult to avoid, Lloyds and HSBC being amongst the better choices for us.

Arb.

[Arborbridge]

These are quite astonishing yields, but I would go for Chesnara at a mere 6.8%. I have decided personally not to add to my two tobacco shares or Imperial Brands would be my first choice.

Dod

CSN - yet another financial! I can''t get away from them, it seems. Is there something going wrong at CSN, Dod? On the face of it, I should be topping up, but my capital has been reduced by over 20% since I bought in a couple of year back. so the income is - as you would say - expensively bought.

So many shares to choose from - my list is overendowed with choice at the moment, and little more capital to invest.

Arb.

[tjh290633]

I would just do as the table tells you, barring Persimmon for the reason you give.

As you noted, I topped up BT, IMB and S32 on Thursday, just because they were the top eligible shares in my own rankings for topping up. I know there are concerns that the BT dividend may be cut. So what? The odds are that the yield may still be acceptable after a cut, and the share price could also rise.

I see no point in using an aid to decision making and then ignoring the result. Perhaps tossing a coin, or getting the oracle to examine the entrails of a sacrifice is more to your liking?

TJH

[pyad]

...Lloyds I'll have a think about. It has strong cover, but I've already sunk a big chunk over the years - 4.25% of capital - with little reward...

We've had this discussion before but I fail to see why the proportion of cost that you have already sunk into Lloyds, or any share, should play any part in a top-up decision. I see no logic to this view and it looks like a superstition in that you appear to regard such a share as jinxed, despite it ticking all your HYP top-up boxes.

[Alaric]

I see no logic to this view

It's quite common to impose limits on the percentage by market value, dividend income or both in any one stock. If, despite filters, previous buying decisions have gone badly, maybe there's an unknown factor which the decision making process is ignoring.

[Arborbridge]

...Lloyds I'll have a think about. It has strong cover, but I've already sunk a big chunk over the years - 4.25% of capital - with little reward...

We've had this discussion before but I fail to see why the proportion of cost that you have already sunk into Lloyds, or any share, should play any part in a top-up decision. I see no logic to this view and it looks like a superstition in that you appear to regard such a share as jinxed, despite it ticking all your HYP top-up boxes.

It's a control mechanism for my own lack of judgement. To keep pouring capital into a project without limit would not be logical either - so I prefer to limit my enthusiasm. If a share hasn't resulted in reasonable returns, I see no reason to put ever more capital into at the expense of those which have. It's a bit like the cost sunk fallacy "I'll put a just a bit more in, and it's bound to turn soon".

We start with an equally weight capital input, and it would not be logical to have an ever widening gulf between the top and bottom shares.

[monabri]

I'd consider IMB or AV.
Step 1: Arranging the choices in order of current yield.
Step 2: Review whether you think the yield is sustainable (based on what we collectively have discussed) and also if it is likely to grow.
Step 3: Based on previous comments on the HYP P board for potential candidates, make a choice.



PSN was ruled out in my decision because I don't like what they are selling - or specifically, the quality. You can only sell poor quality for a while until your customers run away ..or complain to the papers about minor things like ...fire safety or some regulatory body steps in. Did I mention customer nervousness due to a hard Brexit?

That drops it down to IMB as possible candidate #1 - is the yield sustainable and do we expect an increase in divi going forward? OK - the growth rate is slowing but even if it halves it (growth rate) is comparable with many other HYP picks. (possible tie up with Japan Tobacco Industry in the future as a throw away line?)

BT - forewarned of a cut ahead.....ditto SSE.

SLA - freeze for now but how bright is the future if they can't get increases in AUM (and then you go and do something off the wall like sell a profitable part of the business to PHNX on the cheap).

Aviva - Possibly candidate #2. I wonder if there will be a special divi when they sell off the Asia business?

Lloyds - Possible candidate #3 but the offering (yield) is reducing now.

BLND - not for me. Its fortunes are linked to retail aren't they?

I ruled out some of the lower yielders because of dividend history (SBRY a "cereal offender" ) or Political/Regulatory pressures (UU & IGG perhaps).

I also ruled out Chesnara - why buy CSN at 6.8% when you can buy LGEN at a similar (or higher) yield?

[Arborbridge]

Monabri,
Thanks for the effort you've gone to there, it's most helpful. At present, I have a buy placed on Aviva, and nothing I've seen so far makes that look "invalid". So many of those possibilities are worth further investment that to some extent it doesn't much matter which I choose. IMB would be worthy too.

British Land , BTW, has about 40% retail spread over different retail types. Most of the rest is office space in London - which could be a good or bad thing depending how much the Brexit fears have been under/over done.

Arb.

[Dod101]

[CSN - yet another financial! I can''t get away from them, it seems. Is there something going wrong at CSN, Dod? On the face of it, I should be topping up, but my capital has been reduced by over 20% since I bought in a couple of year back. so the income is - as you would say - expensively bought.

So many shares to choose from - my list is overendowed with choice at the moment, and little more capital to invest.

Chesnara has come back quite a bit in the last two weeks although it is well down on the nearly £4 a year or so ago. I do not think there is anything wrong with it, maybe just that Phoenix and Legal & General are getting more attention. You were asking for suggestions though from the table you produced and it would be my choice. I agree that there may be better choices in general but I was simply picking from your table.

Imperial Brands would be the other choice but I have resolved to wean myself off the tobaccos if possible.

Dod