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Selling Unilever?

General discussions about equity high-yield income strategies
Gengulphus
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Re: Selling Unilever?

#259245

Postby Gengulphus » October 21st, 2019, 11:47 am

tjh290633 wrote:
moorfield wrote:
Itsallaguess wrote:, as I personally consider the 'High Yield' description to be portfolio based, and not necessarily a barrier to entry for each and every constituent,

I quite agree IAAG.

In point of fact, I believe that the boundary between the FT350HY Index and the FTSE350LY Index is the average yield on the FTSE350 index when the indices are calculated. So there is no differentiation in that index between high and higher, just that they are above the boundary.

I'm afraid it's not that simple... The average yield is used, and I think that when a new company enters the FTSE350, which of the FTSE350HY or FTSE350LY it also enters is just a matter of whether their yield is above or below average. But once in one of them, in the first instance the review process only automatically promotes FTSE350LY companies to the FTSE350HY if their yield is more than 1.15 times the average, and only automatically demotes FTSE350HY companies to the FTSE350LY automatically if their yield is below 0.85 times the average. Then it does some adjustments to companies between 0.85 and 1.15 times the average with the aim of giving the FTSE350LY and FTSE350HY indices market capitalisations that are as equal as possible. When an adjustment is done, it is always to demote the lowest-yield FTSE350HY company or promote the highest-yield FTSE350LY company, but that's only done for as long as it continues to bring the two closer to having equal market capitalisations. So the review process can leave companies with above-average yields in the FTSE350LY index, as long as their yields haven't risen too far above average, and similarly it can leave companies with below-average yields in the FTSE350HY index, as long as their yields haven't fallen too far below average.

Full details are in FTSE's UK Ground Rules, on pages 30-32. One other detail that I think is worth calling out explicitly is that this review process is only done once per year, I believe at the June review. At the other three quarterly reviews of the FTSE in March, September and December, companies that leave the FTSE350 also leave whichever of the FTSE350HY and FTSE350LY they're in, and companies that join the FTSE350 are added to one of them according to whether their yields are above or below average, but nothing further is done.

Gengulphus

PrefInvestor
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Re: Selling Unilever?

#259257

Postby PrefInvestor » October 21st, 2019, 12:56 pm

Dod101 wrote:As Pref must know no share goes upwards in a straight line, not upwards for ever. It has fallen back over the last few weeks but that is hardly surprising. I took some profits at £50 so I am perfectly happy with it, although it amuses me that we have such discussion about Unilever on this High Yield Board without challenge. Unilever is not a high yield share.

Dod


Hi Dod, Well your tolerance for the volatility of equities greatly exceeds mine, ULVR now down ~15% off its high. Looking at a chart for ULVR I couldn’t help notice that the price peaked pretty much exactly when the GBP was at its lowest and fell significantly after that with its recent recovery to almost 1.30.

They clearly have massive foreign earnings and haven’t done too well hedging this year, see article below:-

https://www.eurofinance.com/news/unilev ... em-losses/

But anyway this says to me that Unilever’s share price appears highly sensitive to movements in the GBP. So if we get a brexit deal through Parliament, or end up remaining, or in fact do most anything except a no deal brexit (now relatively unlikely IMV and the only situation where analysts think that the GBP will fall significantly again, a return to somewhere in the 1.3x range being predicted in all other scenarios from what I have read of late) then the Unilever SP may continue its recent poor performance ?.

Could be wrong as always…….

GBP up a bit today (21/10) I note, ULVR down another 1.9%.

ATB

Pref

Dod101
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Re: Selling Unilever?

#259260

Postby Dod101 » October 21st, 2019, 1:21 pm

PrefInvestor wrote:Hi Dod, Well your tolerance for the volatility of equities greatly exceeds mine, ULVR now down ~15% off its high. Looking at a chart for ULVR I couldn’t help notice that the price peaked pretty much exactly when the GBP was at its lowest and fell significantly after that with its recent recovery to almost 1.30.


I have a high tolerance for volatility because I am primarily interested n income but I appreciate that it all depends where you are in your investing career. I want my capital to be at least protected against inflation but beyond that I am not too bothered. Unilever is still a great business whatever the share price does in the short term. I will not be selling.

Dod

Bouleversee
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Re: Selling Unilever?

#259317

Postby Bouleversee » October 21st, 2019, 6:14 pm

I read that the drop in their ice-cream sales had made a significant dent in profits. Must check which ones they make. :)

monabri
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Re: Selling Unilever?

#259335

Postby monabri » October 21st, 2019, 7:30 pm

Bouleversee wrote:I read that the drop in their ice-cream sales had made a significant dent in profits. Must check which ones they make. :)



Here's a list of their brands....if you have a spare 10 mins or more! There is a section on Ice Cream....(click on "contents").

https://en.m.wikipedia.org/wiki/List_of_Unilever_brands

p.s. sales of 1 billion euros in Magnum alone :mrgreen:

moorfield
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Re: Selling Unilever?

#259354

Postby moorfield » October 21st, 2019, 8:56 pm

Gengulphus wrote:
tjh290633 wrote:
moorfield wrote:I quite agree IAAG.

In point of fact, I believe that the boundary between the FT350HY Index and the FTSE350LY Index is the average yield on the FTSE350 index when the indices are calculated. So there is no differentiation in that index between high and higher, just that they are above the boundary.

I'm afraid it's not that simple... The average yield is used, and I think that when a new company enters the FTSE350, which of the FTSE350HY or FTSE350LY it also enters is just a matter of whether their yield is above or below average. But once in one of them, in the first instance the review process only automatically promotes FTSE350LY companies to the FTSE350HY if their yield is more than 1.15 times the average, and only automatically demotes FTSE350HY companies to the FTSE350LY automatically if their yield is below 0.85 times the average. Then it does some adjustments to companies between 0.85 and 1.15 times the average with the aim of giving the FTSE350LY and FTSE350HY indices market capitalisations that are as equal as possible. When an adjustment is done, it is always to demote the lowest-yield FTSE350HY company or promote the highest-yield FTSE350LY company, but that's only done for as long as it continues to bring the two closer to having equal market capitalisations. So the review process can leave companies with above-average yields in the FTSE350LY index, as long as their yields haven't risen too far above average, and similarly it can leave companies with below-average yields in the FTSE350HY index, as long as their yields haven't fallen too far below average.

Full details are in FTSE's UK Ground Rules, on pages 30-32. One other detail that I think is worth calling out explicitly is that this review process is only done once per year, I believe at the June review. At the other three quarterly reviews of the FTSE in March, September and December, companies that leave the FTSE350 also leave whichever of the FTSE350HY and FTSE350LY they're in, and companies that join the FTSE350 are added to one of them according to whether their yields are above or below average, but nothing further is done.

Gengulphus


I think everyone here is familiar enough with my interpretation of what "high yield" is. Use the City of London IT (CTY) as a benchmark. [Deletion.]
Moderator Message:
Disrespectful part deleted. - Chris

monabri
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Re: Selling Unilever?

#259934

Postby monabri » October 24th, 2019, 6:16 pm

Going against the opening question for this topic, I decided to buy some shares in ULVR ... not for "HYP Practical" reasons as that doesn't really hold water for a new buy, I'm looking long term and hoping that they can maintain the long term total return levels - or at least something approaching it.


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