Staffordian's HYP Review

[staffordian]

With the demise of The Motley Fool’s boards, I thought I would mark the move to Lemon Fool by presenting my HYP for your education, amusement and enrichment - well, amusement at least!

A bit of background.
I started this HYP in September 2013. Long term regulars to TMF’s High Yield – HYP Practical board who possess particularly sharp memories might recall that I previously reported on my HYP many years ago; in 2011 to be precise, at which point I’d been nurturing it for about six years. For anyone interested in looking, it is here:
http://boards.fool.co.uk/staffordian821 ... 07781.aspx

or here:
http://web.archive.org/web/201111150100 ... 07781.aspx

However in 2013 circumstances changed and I had to liquidate my HYP (and the significant capital appreciation was of great help there!) to facilitate a house move and help our son to take a step onto the housing ladder.
This HYP is presently a mere shadow of it’s late relative but will receive a low five figure injection each year for the next seven or eight years so all being well, it will eventually emulate it. For the foreseeable future, all dividends will be reinvested too.

The portfolio looks as follows, and will remain largely unchanged until the next ISA season begins.

Code: Select all

Company Name                   Ticker  Sector                       % of median  F yield
BAE Systems                    BA      Aerospace and Defence               156%     3.6%
Imperial Brands Group          IMB     Tobacco                             156%     4.5%
GlaxoSmithKline                GSK     Pharma                              124%     5.4%
Legal & General Group          LGEN    Life Insurance                      113%     6.2%
HSBC Holdings                  HSBA    Banks                               111%     6.3%
Lancashire Holdings            LRE     Insurance (non-life)                110%    10.7%
Interserve                     IRV     Support Services                    108%     8.5%
Scottish & Southern Energy     SSE     Electricity                         100%     6.3%
Berkeley Group Holdings Units  BKG     House Builders                       98%     7.9%
Royal Dutch Shell 'B'          RDSB    Oil & Gas Producers                  95%     7.5%
Marston's                      MARS    Booze                                94%     5.1%
Vodafone Group                 VOD     Mobile Telecomms                     92%     6.3%
Centrica                       CNA     Gas, Water & Multiutilities          81%     6.1%
Brown (N.) Group               BWNG    General Retailers                    57%     7.0%
Card Factory                   CARD    General Retailers                    45%     3.4%
                             


The sector spread is as follows:

Code: Select all

Tobacco                          10.2%
Aerospace and Defence            10.2%
Pharmaceuticals & Biotechnology   8.1%
Life Insurance                    7.3%
Banks                             7.2%
Insurance (non-life)              7.2%
Support Services                  7.0%
General Retailers                 6.6%
Electricity                       6.5%
House Builders                    6.4%
Oil & Gas Producers               6.1%
Booze                             6.1%
Mobile Telecommunications         6.0%
Gas, Water & Multiutilities       5.3%
                               


Apart from the two retail shares, which were “half units” I invested roughly equal amounts in each one.
The forward yield according to Digitallook is a smidgeon over 6.2%. I realise this is at the upper (risky) end of the spectrum, and some of the constituents might not be considered standard safe HYP choices, but I’m happy to accept a higher degree of risk given that I’m not currently reliant on the income.
My future plans are to grow it by either topping up or introducing new shares, the choice being dependant on whichever meets yield and diversification criteria.
I don’t intend to tinker to any significant extent, though should the price of a share run away or a dividend cease, I will consider a top slice or sale.
Finally, I must thank Pyad for the initial inspiration for my HYP, and whilst naming some means surely offending others, I must nonetheless mention Gengulphus, TJH, Ian Pickering, Bree, Arb, Itsallaguess, Kiloran and last but not least, Luniversal, who I must also thank for my smaller B7 IT portfolio.
And, of course, it would also be remiss of me not to express my sincere thanks to Clariman and Stooz, without whom I would be unable to post this report.

All comments, suggestions and criticisms welcome!

Staffordian

[idpickering]

That's a good looking HYP Staffordian. Filled with the usual suspects mingled with some other bets. I'm inspired regarding your booze choice, but I think I'd prefer Greene KIng due to it's higher market cap, despite the slightly lower yield on offer. You're aware of the risks you're taking with the higher yielding shares such as LRE at over 10%, and you're ok with that, which is fine.

I'm honoured to have been named in your post, so thank you. I intend to put up my own HYP at some point, when I get my head around how it's done here

All the best,

Ian.

[staffordian]

That's a good looking HYP Staffordian. Filled with the usual suspects mingled with some other bets. I'm inspired regarding your booze choice, but I think I'd prefer Greene KIng due to it's higher market cap, despite the slightly lower yield on offer. You're aware of the risks you're taking with the higher yielding shares such as LRE at over 10%, and you're ok with that, which is fine.

I'm honoured to have been named in your post, so thank you. I intend to put up my own HYP at some point, when I get my head around how it's done here

All the best,

Ian.

Thanks for the comments Ian.

With regard to the booze, I was in two minds between Greene King and Marstons. I had GNK in my previous HYP and it did the business, (as well as giving me vouchers!) but when the decision was taken, there was a fair difference in the forecast yields, so despite it's inferior dividend history, I went with Marstons. I fully expect to include GNK in the not too distant future as I build up the holdings.

I look forward to seeing your update when you've sorted out the technique.I have to say, posting tables is a piece of cake thanks to Kiloran's table tool http://lemonfoolfinancialsoftware.weebl ... ormat.html

Staffordian

[Raptor]

Nice HYP. I like you picked MARS when the choice was close. There are a couple that I have not had on my radar. Thanks for the post.

Raptor

[jackdaww]

A nice well balanced portfolio.

i chose green king from the booze selection , although i have conviviality elsewhere.

Card factory i will look at .

thanks.

.

[GrahamPlatt]

I've been looking into IRV myself, but concluded they're a value trap.

[GrahamPlatt]

OTOH, my remark relates to the current situation they find themselves in. Things may have looked a lot different when you bought in.

[idpickering]

I look forward to seeing your update when you've sorted out the technique.I have to say, posting tables is a piece of cake thanks to Kiloran's table tool http://lemonfoolfinancialsoftware.weebl ... ormat.html

Staffordian

Thanks for the pointer to this Staffordian. It's certainly a long winded way of doing things though.

Regards,

Ian.

[staffordian]

I've been looking into IRV myself, but concluded they're a value trap.

OTOH, my remark relates to the current situation they find themselves in. Things may have looked a lot different when you bought in.

Fair point.

I paid 296 for them and was aware of the issues up North but thought (hoped?) that their overall performance and the breadth of their operations would see them through. Time will tell!

It's a tricky one, this looking into the future. Who would have forecast BP's Gulf problems and the affect that had on them for several years, or earlier, the banking crisis and it's effects, especially on the HYP darling that was Lloyds.

Whilst I try to take full account of what's known, I do try to exercise strategic ignorance over future unknowns, or I'd talk myself out of buying anytbing

[idpickering]

Whilst I try to take full account of what's known, I do try to exercise strategic ignorance over future unknowns, or I'd talk myself out of buying anytbing

Have a 'virtual rec" sir. That made me laugh out loud.

Ian.