what's too high?

[kempiejon]

I've had a look at the highest yielders available today.
Shell, BP, SSE, and Vodafone all over 6% from the 100 index, Petrofac, Centamin, Galliford Try, Electra Private Equity, Aberdeen Asset Management, Stagecoach Group, Marston's, Phoenix Group Holdings and GCP Infrastructure Investments in the 250. They'd not all pass my safety factors but I have all the biggest and a couple out of the next tier. I'm optimistic and would recon some could take new money what do other think - should we ask the shorters?

[moorfield]

It's an interesting question, kempiejon, that also crossed my mind yesterday:
viewtopic.php?f=15&t=6218&p=66330#p66330

CLLN's yield on Friday immediately before the dividend announcement was 9.6%.
(Dividend 18.45p / Close 192.3p)

Actually that analysis could be repeated for every other company that has cut or suspended its dividend in recent years, and mean/median/modal values deduced for what Mr Market deems "serious trouble". An interesting time-killing project perhaps!

Someone may have collected some more stats on this already (Gengulphus?). If not, maybe we could all put together a collaborative summer project here?

[vrdiver]

I've had a look at the highest yielders available today.
Shell, BP, SSE, and Vodafone all over 6% from the 100 index, Petrofac, Centamin, Galliford Try, Electra Private Equity, Aberdeen Asset Management, Stagecoach Group, Marston's, Phoenix Group Holdings and GCP Infrastructure Investments in the 250. They'd not all pass my safety factors but I have all the biggest and a couple out of the next tier. I'm optimistic and would recon some could take new money what do other think - should we ask the shorters?

Using http://www.shorttracker.co.uk/:

Company    % Short
  BP         0
  SSE        0
  VOD        0.69%
  PFC        7.62%
  CEY        0
  GFRD       0.8%
  ELTA       0
  ADN        0
  SGC        1.77%
  MARS       1.55%
  PHNX       0
  GCP           (didn't come up in shorttracker so may never have been shorted?)

So from that list, PFC may be the next test of whether the shorters are a useful filter....

[kempiejon]

vrdriver, thanks for those shorters numbers, I see Carillion 25% odd, had it been much higher?

I can see people having jitters about PFC, corruption investigations and the like, is 7% short a worry? Perhaps I misunderstand shorting, isn't it putting money behind the belief that the share price will fall? People must have opinions like that all the time. For every buyer there's a seller.

[monabri]

PFC is now 7.53% (7.73 -to 7.62 to 7.53%) and might be lower tomorrow.

CLLN is also lower at 23.29% (shorters gradually closing their positions)

The FCA link is more up to date than shortracker but the latter has other useful features 9graphs for example)

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

I think that you should also add Wood Group and AMFW to your list (re PFC) especially Wood Group!


The FCA site gives historical data so you can check other companies - remember that below 0.5% they are not reported so you might have 20 companies all sitting at 0.49% !

[monabri]

PFC has been shorted previously at a much higher level (10.6% Feb 2016).

source:

http://shorttracker.co.uk/company/GB00B0H2K534/all

FWIW I think you were right to ditch M&S but you might have jumped on PFC a bit early - who knows - just an opinion. BUT if it helps you sleep at night it is def the correct decision.

[Hyppie]

The difference between PFC and CLLN is that PFC's underlying business hasn't changed much (barring some concern about the impact this has on its ability to generate new work). CLLN's underlying business is the problem.

[idpickering]

You may be right monabri: I still think PFC has a lot of upside should things turn out positively. I just felt that if PFC did the CLLN thing, it would be a nasty hit to lose 7%, particularly having had the chance to bank a swift profit. I needed to get the position "right sized" for where I am mentally. Doris would be horrified I know, but then Doris probably wouldn't have speculated on an uncertain falling knife situation so heavily in the first place!

Well done for biting the bullet and following your instincts. Peace of mind is important. As I've mentioned in other threads recently, I've been 'fiddling' with my HYP, CLLN gone and swapped out of ULVR yesterday, and I feel better for having made those changes. The health of my HYP in it's ability to provide a high and rising income is important too. I don't like interfering with my HYP normally and intend to go back to my 'hands - off' policy going forward.

Regards,

Ian.

[vrdiver]

vrdriver, thanks for those shorters numbers, I see Carillion 25% odd, had it been much higher?

I can see people having jitters about PFC, corruption investigations and the like, is 7% short a worry? Perhaps I misunderstand shorting, isn't it putting money behind the belief that the share price will fall? People must have opinions like that all the time. For every buyer there's a seller.

Carillion has been building over quite a while, it peaked at around 7% in Aug 2013, dropped to under 2% during 2014, before ramping up to just below 19% in 2015, hovering just over 20% during 2016 and finally peaking around 25% in 2017 when a new FD let the cat out of the bag...

If they hadn't had the review I wonder how much longer the shorters would have been able to hold out for? (Not that I blame them for the collapse - that's management's fault, but I do wonder how they knew that trouble was brewing when the RNS's over the same period gave no hint.)