DS Smith topup

[Arborbridge]

Rather on a whim, I'm afraid, in my sometimes undisciplined way, I overtopped my holding on DS Smith today which is XD tomorrow.
The price has suffered somewhat since October 18 but now seems to have stabilised at a decent yield. I say "decent", it is 4.8% which is below my usual HYP topup zone the threshold of which is in the region of 5.2%.
This wouldn't normally count at "this month's topup" as I haven't played it by the HYPTUSS, but Smith seems a reasonable company at a reasonable yield.

Current size in my HYP is x1.1 median after topup, lying now in 28th place. It should provide 2.5% of my income.

That's all folks. If there's an "October topup" I'll do it properly with the table, but I thought this should just be logged.

Arb.

[idpickering]

Rather on a whim, I'm afraid, in my sometimes undisciplined way, I overtopped my holding on DS Smith today which is XD tomorrow.
The price has suffered somewhat since October 18 but now seems to have stabilised at a decent yield. I say "decent", it is 4.8% which is below my usual HYP topup zone the threshold of which is in the region of 5.2%.
This wouldn't normally count at "this month's topup" as I haven't played it by the HYPTUSS, but Smith seems a reasonable company at a reasonable yield.

Current size in my HYP is x1.1 median after topup, lying now in 28th place. It should provide 2.5% of my income.

That's all folks. If there's an "October topup" I'll do it properly with the table, but I thought this should just be logged.

Arb.

Cheers for that Arb. I topped up my SMDS holdings last week, bringing them up to average weight in capital value terms of my 29 share HYP. A steady Eddy type of company imho, and I'm happy to have it on board. A long term hold for me now. Happy birthday for me tomorrow, with a number of my holdings going ex div, including SMDS as you said, and Diageo paying me a birthday dividend pressie.

Ian.

[ReformedCharacter]

Happy birthday for me tomorrow, with a number of my holdings going ex div, including SMDS as you said, and Diageo paying me a birthday dividend pressie.

Ian.

Have a good birthday Ian

RC

[Arborbridge]

Happy birthday for me tomorrow, with a number of my holdings going ex div, including SMDS as you said, and Diageo paying me a birthday dividend pressie.

Ian.

Happy birthday Ian. Many going XD tomorrow, but SMDS was the only one I went for.



Arb.

[dealtn]

...Many going XD tomorrow, but SMDS was the only one I went for.


Arb.

Why the interest in buying (immediately) before going XD? Genuine question btw. Wait a day, and with the fall in price equivalent, you can buy more shares and benefit from increased future dividend payouts (or, I suppose, buy the same number of shares, with a reduced outlay equivalent to the dividend foregone remaining as cash). Even were there to be no tax implications for yourself (there would for me) it seems intuitively a bit circular to me.

[Arborbridge]

...Many going XD tomorrow, but SMDS was the only one I went for.


Arb.

Why the interest in buying (immediately) before going XD? Genuine question btw. Wait a day, and with the fall in price equivalent, you can buy more shares and benefit from increased future dividend payouts (or, I suppose, buy the same number of shares, with a reduced outlay equivalent to the dividend foregone remaining as cash). Even were there to be no tax implications for yourself (there would for me) it seems intuitively a bit circular to me.

Yes, quite right, and we've discussed that many times here. Since I live entirely on the dividends, it's just nicer to see and immediate flow back into my account rather than having to wit another six months or whatever when the capital "feels" dead. I'm not so bothered as I used to be about it, and I know logically it is possibly not the best course.
The other factor is that the price does not always fall as anticipated anyway - it's certainly more random than one might think. In practical terms, which ever way one does it is not life-changing!

There is another stock I might have bought yesterday, so I will be interested to see if that does drop enough to pull me in xd.

Arb.

[Arborbridge]

The other factor is that the price does not always fall as anticipated anyway - it's certainly more random than one might think. In practical terms, which ever way one does it is not life-changing!

There is another stock I might have bought yesterday, so I will be interested to see if that does drop enough to pull me in xd.

Arb.

On this occasion it would have worked rather well.... three stocks I checked SMDS, MYI and MRCH have all dropped more in pence than the dividend amount, and that can't be accounted for by overall market movement.


Arb.

[Gengulphus]

... Even were there to be no tax implications for yourself (there would for me) it seems intuitively a bit circular to me.

There are tax implications for everyone, though they are tiny for shares held in tax shelters. E.g. suppose you buy 1000 shares at a price of 100p, the day before they go ex-dividend on a 2p dividend, and that the share price duly falls to 98p the next day. You pay 1000 * 100p = £1k for the shares, plus 0.5% = £5 stamp duty and your broker's commission of say £10, for a total cost of £1,015.00, and you receive the dividend of 1000 * 2p = £20 a few weeks later. So the net cost to you after those few weeks is £1,015.00 - £20.00 = £995.00. If you waited until the next day, it would cost you 1000 * 98p = £980 for the shares, plus 0.5% = £4.90 stamp duty, plus the same broker commission of £10, and you wouldn't receive the dividend (though you would receive all later dividends), for a net cost after those few weeks of £984.90. So there is a 10p tax difference even inside a tax shelter - a tiny difference and much smaller than the £2.00 or £6.50 Income Tax due on the dividend at basic or higher rate if outside a tax shelter and tax allowances, but not quite non-existent!

Having said that, all of those differences can easily be wiped out or doubled by normal share price fluctuations from one day to the next - the share price only needs to move by about 0.01p, 0.21p or 0.66p respectively away from the theoretical ex-dividend price to wipe them out or double them. So I'm not saying that any of them are of any great importance - but such as they are, they do all exist!

Gengulphus

[Arborbridge]

I'm tempted to say "that worked out well, then"!

My yesterday's SMDS purchase has dropped over 5% - that's far more than the dividend, so there's all the company specific worries about the general situation at play, presumably. I'm just glad I didn't buy any more for Mrs Arb!

MYI I also purchased, has dropped 26p, again far more than the 12p dividend, and in both cases far more than the market.

I notice that SMDS is the biggest faaller in the FTSE today - I certain know how, pick 'em and time the market

[Bouleversee]

Don't beat yourself up, Arb. It's all a gamble these days and down to luck. I actually bought 800 at 365.12p on July 5 when I thought the s.p. was going up so worse than your loss and the 11p div. won't go very far to reduce that. However, I have just bought 1528 @ 325.18p xd so it remains to be seen whether they will go up more than the div. I have foregone or whether I will just compound my loss, probably the latter. Past caring, really. At least, I should get a better return on future divs. if they are maintained or hopefully increased.

Is there any known reason why SMDS have gone down more than the rest of the FTSE and other x-ds today?

[idpickering]

Is there any known reason why SMDS have gone down more than the rest of the FTSE and other x-ds today?

This from HL might be a reason perhaps?

DS Smith on track despite subdued German volumes

(Sharecast News) - DS Smith on Tuesday assured investors that its expectations for overall financial performance remained unchanged despite the continued macro-economic uncertainty.
The FTSE 100-listed packaging business said strong pricing discipline, ongoing operating cost efficiencies and new business wins in Europe and the US had allowed the company to progress despite subdued volumes in Germany, as well as in other economies with significant export-led market exposure.

Miles Roberts, chief executive of DS Smith, said: "The underlying drivers of demand for sustainable corrugated packaging remain strong and our leading offerings for highly resilient fast-moving consumer goods and e-commerce customers give us confidence of volume and market share growth."

Meanwhile, DS Smith reported that its integration of Europac, which was acquired back in January, and the associated synergy deliveries wre progressing very well, while completion of the disposal of the plastics division was expected before the end of the current calendar year.

Construction of the company's greenfield packaging plant in Indiana, which it said would significantly enhance its capabilities in the US, was fully on track, with production expected to start in this calendar year.

https://www.hl.co.uk/shares/shares-sear ... dinary-10p

nb My bold.

Either way, I'm not going to stress about short term share price movements.

Ian.

[Bouleversee]

Thanks, Ian, and Happy Birthday.

I can't see anything in that report which would suggest a reason for such a drop. As you say, best to ignore and take advantage of opportunities, or sit on one's hands till things become more settled but goodness knows when that will happen and my hands have been getting pins and needles.

[pyad]

...Is there any known reason why SMDS have gone down more than the rest of the FTSE and other x-ds today?

Yes, the random nature of short term share price changes. In other words the reason is that there is no reason.

[PinkDalek]

Is there any known reason why SMDS have gone down more than the rest of the FTSE and other x-ds today?

This from HL might be a reason perhaps?

DS Smith on track despite subdued German volumes

(Sharecast News) - DS Smith on Tuesday ... https://www.hl.co.uk/shares/shares-sear ... dinary-10p

Yes, Happy Birthday, but that comment from Hargreaves Lansdown was dated 3 September 2019 and followed the DS Smith Plc - Q1 AGM trading statement released that day.

https://www.investegate.co.uk/smith--ds--plc--smds-/rns/trading-statement/201909030700109732K/

[Arborbridge]

Don't beat yourself up, Arb.

Generally I don't, although it's amazing how often I add a topup, only the find that the total HYP value has gone down by the end of the day.

I just thought this was a particularly good example of my genius for picking the wrong share - biggest faller in the FTSE100 takes some doing.

Arb.

[Gengulphus]

My yesterday's SMDS purchase has dropped over 5% - that's far more than the dividend, so there's all the company specific worries about the general situation at play, presumably. I'm just glad I didn't buy any more for Mrs Arb!

MYI I also purchased, has dropped 26p, again far more than the 12p dividend, and in both cases far more than the market.

Are you taking account of the intraday fall in the FTSE 100 (or 350 or AllShare) yesterday between when you purchased and the market close? That's important (*) when the market has moved a long way during the day, as it did yesterday: looking at an intraday FTSE 100 chart for yesterday and assuming you made the purchases before your OP (which seems to be implied at least for SMDS by its wording), that intraday fall was at least around 1%. And remember that when a share goes ex-dividend on a market-down day, you expect it to fall by the amount of the dividend plus the market fall. Your MYI fall seems to fit that reasonably well: the 12p dividend is about 1% of the share price, the 26p fall is a bit over 2% of the share price, and it looks like the 1%ish-or-more market intraday fall accounts for the difference reasonably well.

The SMDS dividend that went ex-dividend today is about 3.4% of the share price (**), and another 1%ish or more for the intraday market drop means that a drop of 4.4%ish or more should be expected. I don't see that an over-5% drop is particularly out of line with that, given how much share prices fluctuate from day to day even when there is no very obvious reason for them to move...

(*) For a value of "important" that doesn't really match the HYP philosophy! ;-)

(**) Note this is for the final dividend only, so the SMDS yield is rather higher than 3.4%.

Gengulphus

[idpickering]

Is there any known reason why SMDS have gone down more than the rest of the FTSE and other x-ds today?

This from HL might be a reason perhaps?

DS Smith on track despite subdued German volumes

(Sharecast News) - DS Smith on Tuesday ... https://www.hl.co.uk/shares/shares-sear ... dinary-10p

Yes, Happy Birthday, but that comment from Hargreaves Lansdown was dated 3 September 2019 and followed the DS Smith Plc - Q1 AGM trading statement released that day.

https://www.investegate.co.uk/smith--ds--plc--smds-/rns/trading-statement/201909030700109732K/

Thanks for the birthday wishes PD. As for my link to that item, I thought the German aspect was more up to date, but no worries. Sorry if I mislead anyone.

Ian.

[Arborbridge]

My yesterday's SMDS purchase has dropped over 5% - that's far more than the dividend, so there's all the company specific worries about the general situation at play, presumably. I'm just glad I didn't buy any more for Mrs Arb!

MYI I also purchased, has dropped 26p, again far more than the 12p dividend, and in both cases far more than the market.

Are you taking account of the intraday fall in the FTSE 100 (or 350 or AllShare) yesterday between when you purchased and the market close? That's important (*) when the market has moved a long way during the day, as it did yesterday: looking at an intraday FTSE 100 chart for yesterday and assuming you made the purchases before your OP (which seems to be implied at least for SMDS by its wording), that intraday fall was at least around 1%. And remember that when a share goes ex-dividend on a market-down day, you expect it to fall by the amount of the dividend plus the market fall. Your MYI fall seems to fit that reasonably well: the 12p dividend is about 1% of the share price, the 26p fall is a bit over 2% of the share price, and it looks like the 1%ish-or-more market intraday fall accounts for the difference reasonably well.

The SMDS dividend that went ex-dividend today is about 3.4% of the share price (**), and another 1%ish or more for the intraday market drop means that a drop of 4.4%ish or more should be expected. I don't see that an over-5% drop is particularly out of line with that, given how much share prices fluctuate from day to day even when there is no very obvious reason for them to move...

(*) For a value of "important" that doesn't really match the HYP philosophy! ;-)

(**) Note this is for the final dividend only, so the SMDS yield is rather higher than 3.4%.

Gengulphus

Thanks for that observation - it shows how a casual glance might give the wrong impression. No, I didn't take into account the intraday fall.