Imperial Brands AGM Update

[monabri]

Being a man of my word I just carried out the action I’d mentioned above. Out went IMB, and good riddance, and in came Aviva. That’s enough excitement for one day. I feel better for having taken action, now back to my attempts to be hands off.

Ian.

What made you change your mind on Aviva and re-buy them after selling in August 19?

viewtopic.php?p=245985#p245985

[Dod101]

Being a man of my word I just carried out the action I’d mentioned above. Out went IMB, and good riddance, and in came Aviva. That’s enough excitement for one day. I feel better for having taken action, now back to my attempts to be hands off.

Ian.

What made you change your mind on Aviva and re-buy them after selling in August 19?

viewtopic.php?p=245985#p245985

Aviva would not be my choice but I am a bit odd I suppose. I have not yet sold Imperial because they have not yet reached my price but never mind, I would like to be rid of them but how to replace them is the question.

Dod

[idpickering]

Thanks for your input guys, some nice and helpful, some less so, boardering on offensive. I’m only human, and shall try to be less fickle in the future with my HYP.

Ian.

[TUK020]

With BAT yielding 5.9% and Imperial yielding 11.3% the market is telling us something. It is not often so spectacularly wrong so it is clearly expecting a dividend cut from Imperial. Why I am being blind on this can only be because I have done very well from Imperial over many years. I hold it in my SIPP and also in an ISA so I have the opportunity to sell one holding without seeming to just sell part. I will sell the holding in my ISA without further delay as it went ex div yesterday. I have just placed my customary limit order. Now what to buy?

Dod

Dod,
If IMB were to halve their dividend, what do you think the market reaction would be?
tuk020

[Dod101]

With BAT yielding 5.9% and Imperial yielding 11.3% the market is telling us something. It is not often so spectacularly wrong so it is clearly expecting a dividend cut from Imperial. Why I am being blind on this can only be because I have done very well from Imperial over many years. I hold it in my SIPP and also in an ISA so I have the opportunity to sell one holding without seeming to just sell part. I will sell the holding in my ISA without further delay as it went ex div yesterday. I have just placed my customary limit order. Now what to buy?

Dod

Dod,
If IMB were to halve their dividend, what do you think the market reaction would be?
tuk020

I should imagine shock to begin with and a price drop and then a realisation that the yield is still quite good and a price recovery but I am just fed up of the histrionics and feel that the long term trend is not going to be good for tobacco companies. I have not yet sold as my limit price has not been met.

I may reconsider on Monday but I do not think so. It is free money to me as I have long ago extracted my original investment and more in Imperial.

Dod

[monabri]

The recent case of VOD reducing their dividend might give rise to what might happen at IMB. The similarities being that they are both multi-billion market cap FTSE100 companies and sentiment/expectation of a dividend cut was "in the air".

VOD cut their annual divi from 15.07 cents per share to 9 cents per share - 14th May 2019. The sp was ~126p. The sp today is ~155p.

https://www.londonstockexchange.com/exc ... 72439.html

Graph taken from the London Stock Exchange (here).
https://www.londonstockexchange.com/exc ... XSET1.html



IMB need to work through their problems - appointing a (hopefully half decent) CEO might help - they need to do this pronto!

The question arises (as Dod alluded to) - what about baccy companies in general, what about BATS?

[Dod101]

I was interested to see what happened to Vodafone's share price. I sold in January 2019 before the dividend cut, at £1.478 so I have missed out on the capital increase but console myself with missing the dividend cut. I was only holding Vodafone in the first place for the dividend. I bought BAT and HFEL with the proceeds so I think I preserved my income.

As for Imperial, any cut in the dividend would be taken very badly by the market particularly after the series of 10% increases, and it would take a new CEO and a new Chairman for that to happen I think. They now have both so the stage is set although the new CEO is not yet in situ. Not to say it will happen of course.

As for BAT I think it has behaved altogether more rationally than Imperial. It keeps churning out profits and keeps modestly increasing its dividends just as one would expect from a tobacco company and so its yield is a much more modest 5.9%.

Dod

[IanTHughes]

Thanks for your input guys, some nice and helpful, some less so, boardering {sic} on offensive. I’m only human, and shall try to be less fickle in the future with my HYP.

Repel boarders!

Seriously, I do not think that anyone is being offensive. Rather they are attempting to understand why your particular implementation of the HYP Strategy ends up with the purchase of a block of shares that were sold only 6 months previously, and at a higher price than was received for the sale to boot.

To my mind it is not an unreasonable question, especially for those that want to better understand the HYP Strategy.


Ian

[Walrus101]

I'm continuing to hold them. We'll see. I'd prefer they do nothing and keep churning out the dividend. Including not selling the cigar business and not investing in vaping. However what is best for shareholders is not necessarily best for directors unfortunately.

[Wizard]

Thanks for your input guys, some nice and helpful, some less so, boardering {sic} on offensive. I’m only human, and shall try to be less fickle in the future with my HYP.

Repel boarders!

Seriously, I do not think that anyone is being offensive. Rather they are attempting to understand why your particular implementation of the HYP Strategy ends up with the purchase of a block of shares that were sold only 6 months previously, and at a higher price than was received for the sale to boot.

To my mind it is not an unreasonable question, especially for those that want to better understand the HYP Strategy.


Ian

Understanding that change of heart on Aviva would be interesting, but as I hold IMB I am actually much more interested in what happened in the five hours between about 5.30 and 10.30am to turn IMB from a top-up candidate to a sell. The only thing visible on this board is the comments by Dod, but I struggle with that being the only basis for a complete 180 degree U-turn on IMB, so I would love to know what else was behind the radical change of heart as I might want to take that on board as well.

I am well under water on IMB. As I have said before I have a bit of an 'issue' with crystallising a loss by selling out, but if there is some new news or insight out there it would be good to be able to factor that in to my thinking.

[Dod101]

And without wishing to pour further oil on the fire, I do not rate Aviva as worth buying for reasons that I have documented in the past. It too is currently going through yet another strategic review.

Imps share price is down 2.5% this morning so it may not have been such a bad idea. I seem to have missed the boat.

Dod

[idpickering]

I declare no devine guidance in selling out of IMB, but with them down 2.6% as I type, and AV. down 3.7%, it just goes to show how fickle things can be. Admittedly, the downward market currently lowers all boats. It also shows that I can't time the market, nor any share price, but I never claimed that I could. For me, I'm out of IMB, (and am glad of the fact) but still hold BATS, and shall continue to do so. I always thought they were the stronger of the two anyway. Each to their own so good luck whichever way any of you place your bets. I'm now going to concentrate on doing nothing with my HYP, save for the monthly top ups going forward.

Ian.

[Dod101]

As it happens I think that Ian is right with his pick of BAT over Imperial. I have pro tem missed the boat on my sale of Imperial so will continue to hold them but with the clear aim to sell in due course. Meanwhile it would be good if Japan Tobacco would make a bid!

Dod

[Wizard]

As it happens I think that Ian is right with his pick of BAT over Imperial. I have pro tem missed the boat on my sale of Imperial so will continue to hold them but with the clear aim to sell in due course. Meanwhile it would be good if Japan Tobacco would make a bid!

Dod

Indeed, had I bought BATS instead of IMB when I started my HYP I would only be down 35%, instead of 55% . But hey, I can always benchmark IMB against Royal Mail Group and then it looks a positively good performer, you have to laugh or you'll cry

[kempiejon]

Indeed, had I bought BATS instead of IMB when I started my HYP I would only be down 35%, instead of 55% . But hey, I can always benchmark IMB against Royal Mail Group and then it looks a positively good performer, you have to laugh or you'll cry

Ah yes RMG, they've only increased their dividend by 4% annually, so far BATS although a bit of a wonk moving from bi-annual to quarterly increased at above that and IMB historically more than twice that though we do know the future will not be so generous.

[OLTB]

Meanwhile it would be good if Japan Tobacco would make a bid!

Dod

I sincerely hope not! Not only would I struggle to replace the dividend, but the capital loss would be horrible (unless of course any bid was 90% of current share price as I would then at least break even capital spend wise)

Cheers, OLTB.

[monabri]

I sincerely hope not! Not only would I struggle to replace the dividend, but the capital loss would be horrible (unless of course any bid was 90% of current share price as I would then at least break even capital spend wise)

Cheers, OLTB.

I guess you mean +190%.. Is it likely that JTI ( Japan Tobacco) is in a position to buy out IMB..I think not. I can see some form of "merger" or agreement occurring though.

[jackdaww]

i have sold out of IMPS , as posted on the high yield board .

[OLTB]

I sincerely hope not! Not only would I struggle to replace the dividend, but the capital loss would be horrible (unless of course any bid was 90% of current share price as I would then at least break even capital spend wise)

Cheers, OLTB.

I guess you mean +190%.. Is it likely that JTI ( Japan Tobacco) is in a position to buy out IMB..I think not. I can see some form of "merger" or agreement occurring though.

Whoops! Yes, I meant a 90% premium to current share price...

Cheers, OLTB.

[pixtel]

At 1700p, div 206.57p

50% cut = 6.08% div yield
40% cut = 7.29% div yield
30% cut = 8.50% div yield
20% cut = 9.72% div yield