BT - I've gone wobbly

[YeeWo]

http://www.telegraph.co.uk/business/201 ... ssets-7bn/

I fully appreciate BT has never been HYP(ish), however, I would appreciate some opinions. The Telegraph' article above worries me. The Question raised by The Telegraph is the 16%-ish of BT stock which is with trade holders without strategic intent. The disposal by Orange of 4% of BT and by Deutsche Telekom of 12% of BT could Really Damage the BT SP!!

I'm a relatively New BT Investor, I bought in at the beginning of 2017 after the Italian accounting scandal. My average holding price is 319p and BT represents 6% of my portfolio. As things stand I've lost circa 4.5% of my money. These figures don't unduly worry me, as long as BT's dividend remains solid it should be OK over time.

I very much like doing as little trading as possible with my stocks. However the article cited is worrying, my BT shares have moved onto The Naughty Step.

OPINIONS GRATEFULLY RECEIVED!

[moorfield]

OPINIONS GRATEFULLY RECEIVED!

I'm sure pyad will be along soon to tell us that there's not an awful lot of strategic ignorance happening on the board today.

[csearle]

I fully appreciate BT has never been HYP(ish)...

Well looking back I found BT sufficiently HYPish to buy them in 2010. I've since top-sliced them a couple of times to prevent them becoming more dominant than I like.

Regards,
Chris

[monabri]

From what I've seen in recent months a significant factor that affects share price is the concentrated efforts of the shorters who pick up and amplify every bit of bad news ...for their own benefit - example Petrofac. The good news regarding BT is that no one appears to be shorting them ( for the moment).

https://www.fca.org.uk/markets/short-se ... -positions

I hold BT and I too bought after the Italian job and I'll be holding. It could be a lot worse, we could have bought before the news on the Italian accounting issue.

On the other hand, if TMF had them as a recommendation I would sell them at 8:01 tomorrow! ( PFC , IRV , TSCO) .

[tjh290633]

I fully appreciate BT has never been HYP(ish), however, I would appreciate some opinions.

I've just looked through my records, which date back to when BT was privatised in 1984. I can see plenty of occasions when BT had a good yield. Like all shares, it has had its ups and downs, so if you look at 1996 it had dividends of 18.7p with a share price of about 350p. On the other hand, in 2009-10 it cut its dividend from 15.8p to 6.5p, and the share price was down at 88p. Now we have a dividend of 15.4p on a share price just above 300p.

You might like to work out the yields for yourself.

TJH

[monabri]

Here's an interesting question...

http://www.fool.co.uk/investing/2014/01 ... -to-1513p/

£15 a share. £15 a share.... .

[Gengulphus]

I fully appreciate BT has never been HYP(ish), ...

I don't - and neither does pyad! See https://www.lemonfool.co.uk/viewtopic.php?f=15&t=432...

Gengulphus

[Gengulphus]

On the other hand, if TMF had them as a recommendation I would sell them at 8:01 tomorrow! ( PFC , IRV , TSCO) .

I think following that principle properly probably leads to you liquidating your entire portfolio at 8:01 tomorrow! (As far as I'm aware, TMF don't have a 'party line' about which shares their writers recommend buying or selling - so one can generally find TMF articles approving of just about any prominent share, and the same goes for articles disapproving of them...)

Gengulphus

[Dod1010]

BT has been well qualified as a HYP share for many years since privatisation, and as Gen said there have also been periods when it has not been. The biggest concern has usually been its pension fund deficit and more recently the problems in Italy. It is such a sprawling outfit with what has always been not very good public service that I am a bit of reluctant holder. I only have a small exposure though so I expect I will just hang on. I have said before that I grade my holdings according to desirability and BT comes bottom.

So yes go wobbly and sell if you would feel better doing so.

Dod

[Gengulphus]

BT has been well qualified as a HYP share for many years since privatisation, and as Gen said there have also been periods when it has not been. ...

Not disputing that there have been periods when BT was not a HYP share - but I have NOT said it up to now.

Gengulphus

[YeeWo]

The fall today was the final-straw. I've sold BT, topped-up GSK and added Coca-Cola Hellenic and Intercontinental Hotels. Both are suitably internationally diversified and have decent records. My Portfolio as a consequence (% column is % of my holdings) : -

EPIC | SP     |  % | 1st Buy   | XIRR   | ROCE   | Fcst Yld
BP   |  £4.66 | 6% | 14 Jan 15 | 14.00% |        |    6.50%
BATS | £55.17 | 4% | 15 Aug 16 | 12.17% | 40.90% |    3.10%
BLND |  £6.30 | 4% | 25 Nov 16 |  8.40% |  2.00% |    4.90%
BT   |  £2.97 | 0% | 24 Jan 17 | -9.55% | 40.50% |    5.40%
CCH  | £23.28 | 2% | 09 Jun 17 | N/A    | 19.90% |    1.80%
DGE  | £23.26 | 7% | 12 Jan 11 |  9.97% | 31.30% |    2.60%
G4S  |  £3.36 | 6% | 28 Jun 16 | 92.79% | 15.60% |    2.90%
GSK  | £16.99 | 4% | 17 Aug 16 | -1.61% | 100%+  |    4.70%
HSBA |  £6.95 | 5% | 04 Nov 08 | 10.91% |  3.20% |    5.90%
IMB  | £35.64 | 4% | 29 Mar 17 | -1.47% | 100%+  |    4.70%
INCH |  £7.95 | 6% | 24 Feb 09 | 13.42% |    17% |    3.30%
IHG  | £44.28 | 2% | 09 Jun 17 | N/A    |        |    2.00%
JLT  | £11.95 | 5% | 04 Mar 16 | 36.60% | 33.20% |    2.80%
RB   | £79.42 | 2% | 29 Mar 17 | 11.97% |        |    2.10%
REL  | £16.92 | 5% | 01 Aug 10 | 22.44% |        |    2.40%
RR   |  £9.04 | 5% | 22 Oct 14 |  8.03% |  3.60% |    1.40%
RDSB | £21.41 | 7% | 15 Sep 15 | 37.60% |  2.10% |    6.80%
SN   | £13.52 | 5% | 06 Oct 16 | 18.00% | 50.20% |    1.80%
ULVR | £43.26 | 8% | 12 Jan 11 | 14.38% | 85.90% |    2.80%
VOD  |  £2.21 | 5% | 06 Oct 16 |  5.87% |  4.90% |    5.40%
WPP  | £16.67 | 8% | 17 Aug 16 | -1.20% |    98% |    3.60%

I've managed to lose a just-four-figure sum in the months I've held BT. No regrets, I bought for a bounce that doesn't look like it's coming, that said now I've sold it may very well surge upwards!

GLA.

[Breelander]

I've managed to lose a just-four-figure sum in the months I've held BT. No regrets, I bought for a bounce that doesn't look like it's coming, that said now I've sold it may very well surge upwards!

That's not a very HYPish approach...

[YeeWo]

That's not a very HYPish approach...

Totally Correct. I do, as we all do I'm sure(!), like seeing the Dividends roll-in. However I do like to blend this with, at the very least, maintaining capital values. This does necessitate looking at the fundamentals of businesses I'm invested in. The Pension Issue is well known with BT, UK Politics may well necessitate further loose monetary policy which I can see making BT's problems worse rather than better. I'm loath to sell anything I buy, that said BT, Standard Chartered and Tesco have been disposed of in the last 18 months on qualitative grounds reluctantly and after a great deal of thought.

[Dod1010]

BT, Standard Chartered and Tesco have been disposed of in the last 18 months on qualitative grounds

I have never held Stan Chartered or Tesco but I still hold BT. It has a decent dividend and as such I will keep it at least pro tem. Quality? Yes as I have said elsewhere I list my shares on desirability/quality grounds and BT is currently bottom of my list and I probably would not buy today but I hold and will keep with no enthusiasm. I am not being HYPish as I do not believe in Strategic Ignorance but simply keeping it because it is OK, keeps paying the dividends. I understand the risks in doing so (I think!)

Dod

[YeeWo]

Quality? Yes as I have said elsewhere I list my shares on desirability/quality grounds and BT is currently bottom of my list and I probably would not buy today but I hold and will keep with no enthusiasm. I am not being HYPish as I do not believe in Strategic Ignorance but simply keeping it because it is OK, keeps paying the dividends. I understand the risks in doing so (I think!)
Dod

IF I was holding BT with a margin of safety, I'd probably bank the dividends and not worry! I also don't believe in Strategic Ignorance, however, HYPing does reinforce some fantastic principles for which I'm grateful to proponents.

If you notice my portfolio above, Dod1010, you should definitely see some of YOUR influence!!

[Dod1010]

Thanks YeeWo, but do not rely on my influence or views!

Dod

[ZipserSir]

That's not a very HYPish approach...

Totally Correct. I do, as we all do I'm sure(!), like seeing the Dividends roll-in. However I do like to blend this with, at the very least, maintaining capital values. This does necessitate looking at the fundamentals of businesses I'm invested in. The Pension Issue is well known with BT, UK Politics may well necessitate further loose monetary policy which I can see making BT's problems worse rather than better. I'm loath to sell anything I buy, that said BT, Standard Chartered and Tesco have been disposed of in the last 18 months on qualitative grounds reluctantly and after a great deal of thought.

And this is even less HYPish!

Presumably a high yield is not really a consideration for you? What are you trying to achieve?

[vrdiver]

I bought BT in February 2005, topped up in Aug 2006 and again in July 2012.

XIRR is 7.27% (treating all dividends as immediately withdrawn) but the important statistic (IMHO) is the dividend CAGR:

Since first holding (I missed out on the 2005 interim) my dividend CAGR to date is 2.7%, so not very impressive, thanks mainly to the cut in 2009/10.

However, the 5 year CAGR is 13.9%, showing a steady and healthy recovering dividend.

For older holdings, the dividend this year (15.4p is just about recovered to the same level as before the cut (15.8p) but ignores the impact of inflation.

Annual       %
Year          Dividend  Change
2006          £0.083 	
2007          £0.151       82%
2008          £0.158        5%
2009          £0.065      -59%
2010          £0.069        6%
2011          £0.074        7%
2012          £0.083       12%
2013          £0.095       14%
2014          £0.109       15%
2015          £0.124       14%
2016          £0.140       13%
2017          £0.154       10%

5 year CAGR 13.9%

[idpickering]

Notwithstanding all the noise around BT Group, with a forward yield of 5.4% (according to digitallook), on a pe of 10, and cover at 1.7, and at a 52 week low of 294p, they're a screaming HYP buy. I'd have no issue filling my boots.

Ian.

[peterh]

I bought BT in February 2005, topped up in Aug 2006 and again in July 2012.
....
For older holdings, the dividend this year (15.4p is just about recovered to the same level as before the cut (15.8p) but ignores the impact of inflation.

Annual       %
Year          Dividend  Change
2006          £0.083 	
2007          £0.151       82%
2008          £0.158        5%
2009          £0.065      -59%
2010          £0.069        6%
2011          £0.074        7%
2012          £0.083       12%
2013          £0.095       14%
2014          £0.109       15%
2015          £0.124       14%
2016          £0.140       13%
2017          £0.154       10%

BT has been one of my luckiest investments (I say luck, because skill didn't come into it!).

I inherited some shares from my dad in 2003, who must have got them when they were nationalised. I then got interested in HYP largely through MF in 2008 and bought more BT late in that year based on their lowish price and rising dividend (btw vrdrier, my records suggest a dividend of 11.9p in 2006). The table above shows the effect on the dividend that my purchase had, so I apologise!

I didn't fully appreciate what strategic ignorance was at the time but, because the SP rose over the next few years, I held on to the shares. Eventually, the SP got to a level where the yield was getting pretty low so I sold the 2008 tranche in three chunks between 2013 and 2015 to finance other purchases.

Long story short, I've tinkered more in BT than any other company, but I bought some more BT back in May. Their recent pension scheme reports seem to be encouraging as does the dividend growth policy. So, fingers crossed!