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Cobham - not a pretty sight....

Practical discussions about equity High-Yield Portfolios (HYP) for income
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Tight HYP discussions only please - OT please discuss in strategies
Arborbridge
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Re: Cobham - not a pretty sight....

#32234

Postby Arborbridge » February 17th, 2017, 8:03 am

Bouleversee,

Yet another dud in my portfolio. HYP doesn't seem to be working for me.


Difficult to agree or disagree without knowing what is in your HYP and more detail. It's the whole HYP income one should be focussing on, not the failure of one component. Now, it could be that your HYP has been a failure so far, but we won't know, and won't know why or be able to draw any lessons without the details.

We can't conclude that the "HYP" recipe is a failure from one share - even if it is "another dud".


Arb.

jackdaww
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Re: Cobham - not a pretty sight....

#32251

Postby jackdaww » February 17th, 2017, 8:52 am

BarrenWuffett wrote:
Bouleversee wrote:Yet another dud in my portfolio. HYP doesn't seem to be working for me. The only shares I have made money from don't figure here.

Yes, it was regular disappointments such as this which gradually eroded my faith in hyp as a strategy and I moved on to other more successful ways to invest in 2014/15.

.


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

i flirted with the (seductve) HYP system (very briefly) two years ago , and quickly decided it wasnt for me .

:)

Dod1010
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Re: Cobham - not a pretty sight....

#32253

Postby Dod1010 » February 17th, 2017, 9:08 am

jackdaww wrote:
i flirted with the (seductve) HYP system (very briefly) two years ago , and quickly decided it wasnt for me . :)


You must know as well as anyone that you cannot 'flirt' with any system briefly in investing to know whether it is a success or not. It needs a few years of ups and downs to prove anything - if we ever can.

Dod

monabri
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Re: Cobham - not a pretty sight....

#32260

Postby monabri » February 17th, 2017, 9:22 am

Jackdaww, I'm interested as to "what happened" when you tried a HYP strategy that made you shy away? Was it the cessation of dividends from one or more shares, reduction in portfolio value or something else that changed your mind. I'm also a little surprised that you are browsing this forum.

jackdaww
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Re: Cobham - not a pretty sight....

#32261

Postby jackdaww » February 17th, 2017, 9:29 am

Dod1010 wrote:
jackdaww wrote:
i flirted with the (seductve) HYP system (very briefly) two years ago , and quickly decided it wasnt for me . :)


You must know as well as anyone that you cannot 'flirt' with any system briefly in investing to know whether it is a success or not. It needs a few years of ups and downs to prove anything - if we ever can.

Dod


=====

indeed , but sadly a few years of (possibly) flawed stock selections by a (possibly) flawed system can impact your wealth and morale . and many of us dont have that many years left to conduct (quite tricky to prove) experiments.

i commend flirting in this case...

:) :)

Davidsb
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Re: Cobham - not a pretty sight....

#32269

Postby Davidsb » February 17th, 2017, 9:44 am

And now, courtesy of new CEO David Lockwood, the even worse news.....

According to the Telegraph:-

“This is not ‘a kitchen sinking’,” said Cobham boss David Lockwood. “It’s a horrible phrase and this is not one."

...he insisted it wasn’t a kitchen sinking - the term given to a new chief executive parcelling up all the bad news and problems in a business at once to get it out of the way, and often blaming their predecessor for a company’s woes.

“If it’s a kitchen sinking you would see provisions everywhere,” the straight-talking Mr Lockwood said...

...but Mr Lockwood is upbeat about business. “We can turn this from a laughing stock into a rock star in a couple of years,” he says...


So, absolutely no suggestion of over-cautious provisioning to give Mr Lockwood and his recently-appointed colleagues a chance to shine in a couple of years time by releasing any un-needed reserves, then.....

Looking from a cui bono point of view, let's hope the executive bonus scheme is rigorous enough to exclude any earnings/eps gains resulting from manipulation of exceptional items.....

;¬)

minerjoe
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Re: Cobham - not a pretty sight....

#32273

Postby minerjoe » February 17th, 2017, 10:03 am

Too late for me, COB has been cast off...

Maybe when they have sorted things out and show some kind of decent company plan I will reconsider... the scrapping of the dividend is all together unforgivable in my part - nursing a 60% loss over 2 years, great value. Better to consolidate into a share which pays a more reliable dividend and actually has some cover.

I hate to do it, but I have my limits for forgiveness!

JohnnyCyclops
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Re: Cobham - not a pretty sight....

#32303

Postby JohnnyCyclops » February 17th, 2017, 11:40 am

minerjoe wrote:Too late for me, COB has been cast off...

Maybe when they have sorted things out and show some kind of decent company plan I will reconsider... the scrapping of the dividend is all together unforgivable in my part - nursing a 60% loss over 2 years, great value. Better to consolidate into a share which pays a more reliable dividend and actually has some cover.

I hate to do it, but I have my limits for forgiveness!


Can I check, did you sell now/yesterday, on this most recent news and after the substantial price drop?

What stock have you bought in replacement for your HYP?

On very limited prior research my previous HYP cutters saw the share price come back quite significantly over the subsequent 3-12 months, and if planning to sell, doing it on the 'bad news day' may not be the best way to maximise value.

vrdiver
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Re: Cobham - not a pretty sight....

#32306

Postby vrdiver » February 17th, 2017, 11:49 am

minerjoe wrote: nursing a 60% loss over 2 years, great value. Better to consolidate into a share which pays a more reliable dividend and actually has some cover.


This is where I struggle. As a holder of Cobham, I've also taken the hit to capital (just under a 60% loss), but now I have to decide whether to cut my losses and redeploy into another company, which most likely means never seeing that 60% ever again, or waiting to see what the new management team can do over the next five years? If they do anything like what they say they are going to do, then the capital* should come back, even if not the full 60%, more than the dividends I'd get from redeploying the remaining 40%.

Waiting, even if I sell later, may be a better capital recovery option, or it could lead to a self healing HYP share. As it's (now) less that 0.5% of my portfolio and the overall portfolio yield (and actual dividends) are still on target, I feel no need to act immediately. Of course, it could be that I end up with more chance of Godot turning up than a dividend from Cobham in the next 10 years.

So, a recovery play, or jump to a currently healthy share and hope I don't strike out again?

Decisions decisions.

VRD

*capital DOES matter in that I want it to buy dividend paying companies with...

monabri
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Re: Cobham - not a pretty sight....

#32308

Postby monabri » February 17th, 2017, 11:54 am

I would hope that COB does start to pay a div in a few years time. Otherwise the current management team will be judged to have failed. As you hold at 0.5% of your portfolio it would seem a definite "hold". The dividend loss must be small compared to the capital loss if you sell.

monabri
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Re: Cobham - not a pretty sight....

#32343

Postby monabri » February 17th, 2017, 1:18 pm

Lockwood reckons it can be turned from "laughing stock to rock star in a couple of years" Daily Telegraph

miner1000
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Re: Cobham - not a pretty sight....

#32345

Postby miner1000 » February 17th, 2017, 1:22 pm

Fortunately, and if you are properly diversified, for every Cobham there should be at lease one Unilever.

If your overall income is not slowly rising (or at least staying pretty flat in the bad years) then as Luni would have said, you have too many shares in the Danger Zone. ;)

Cheers, Miner

Bouleversee
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Re: Cobham - not a pretty sight....

#32358

Postby Bouleversee » February 17th, 2017, 1:55 pm

Gilgongo wrote:
HYP doesn't seem to be working for me.


"YHP is a long-term (20+ years) buy and hold strategy and is bound to have setbacks in the build stage. In a well-balanced HYP, Cobham's crash will be a mere fluctuation, causing at most a 5% dent in the overall portfolio."

I came to HYP much too late in the day, then, since I am already 80. And several losses make a rather higher percentage of dents.

The only shares I have made money from don't figure here.


If they don't figure here, you will only make money when you sell them.


Or when they get taken over for a profit, as with BPI and ARM. And if you reinvest HYP dividends in a share which gets taken over at a loss, you haven't really made money there. I can see the attraction for those who want to draw and maximise retirement income and don't care about the capital but less so for the build stage. Horses for courses and much depends on luck imo. Each to his own.

ReformedCharacter
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Re: Cobham - not a pretty sight....

#32518

Postby ReformedCharacter » February 17th, 2017, 8:13 pm

Given promises made by Trump to increase military spending and the favourable exchange rate (from a dollar perspective), what I wonder, are the odds of a takeover? I'll no doubt make a significant capital loss of my holding whatever happens. Fortunately I refused the rights issue.

RC

Bouleversee
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Re: Cobham - not a pretty sight....

#32608

Postby Bouleversee » February 18th, 2017, 11:11 am

ReformedCharacter wrote:Given promises made by Trump to increase military spending and the favourable exchange rate (from a dollar perspective), what I wonder, are the odds of a takeover? I'll no doubt make a significant capital loss of my holding whatever happens. Fortunately I refused the rights issue.

RC

An article in The Times on Friday says that a recent research report by the broker Raymond James Euro Equities says that "the probability of acquisition appears limited to us" on the grounds that Cobham's range of technologies and niche businesses in several different fields would not be attractive to a single buyer." Maybe that's the problem: too many pies requiring too many fingers, acquisitions for acquisitions' sake and little integration or financial discipline . The article says that there appear to be few upsides. Just opinions, of course, but the outlook does appear to be pretty grim. "Cobham has been unable to get out of the spiral of getting it wrong" said one industry source, apparently.

The article also said that shareholders had been told that they are getting no dividend (which we knew) but also that they are to be tapped for funds. Whilst I think this is likely, I was unaware that any statement had been made about this. I took up the last rights but not sure I want to take up any more and although I rarely sell anything, I fear I may once again be watching something decline to nothing or next to nothing, as with Lonmin, where again I have always taken up rights over the years and have lost almost all my investment. Toss a coin, I suppose.


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