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James Halstead JHD

Discuss Stock buying Shares, tips and ideas for stock market dealing
cshfool
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Re: James Halstead JHD

#160594

Postby cshfool » August 19th, 2018, 2:49 pm

For AIM you both might like to have a look at Central Asia Metals Limited (CAML) , showing good ROCE, low capex, high trailing yield, low p/Book value and low PE ratio. Note most database figs on this one are misleading due to a placing and reverse takeover of the SASA lead/zinc mine which only impacted positively on 2 months of SASA production results (2017), but all of the costs. Anyway CAML is usually "net cash" but due to the takeover has residual debt, so is not a certain [popular yielding and divesting] type of share - nod to the aged like myself.

A couple of advertorials are available (research is paid for by the company) in the guise of broker notes but my own fragile efforts are coming up with broadly similar numbers, at least on the forecast dividend, to be determined by the new policy of NFCFops 30%-50% going forward. I'm sticking with 16.5p per share forward div (ie held) in the range 11.2p-18.2p, this brokers note has 16.73p (0.03p? really?) forward div. Some databases appear to have some forward values in dollars, but indicated in pounds which is REALLY careless.

Anyway because the impact of the takeover of SASA is not fully reflected in the published results yet, it may possibly represent a short term research or arbitrage opportunity - the databases are even wronger than usual (the 1/6th profit contribution factor), have a go at scaling up your own forward figs if you fancy, and a reasoned counterblast. :)

http://www.proactiveinvestors.co.uk/col ... 29971.html

Bear points:
Bongo factor political risk (see Acacia for a true mining shocker story)- Macedonia and Kazakhstan, pullback in commods prices, horrible chart action.

Bull points:
Solid track record in previous smaller guise of copper only Kounrad ops, good FCF, ROCE, low PER, low book value (from AR) very low cost base (the copper is extracted, not really mined, from from inefficiently processed Soviet tailings), the SASA zinc and lead are conventionally but cheaply mined (lowest cost quartile), apparently, and big forecast eps increase. On target results in the 2017 AR.

Disclosure; I own some CAML, and I'm super fussy, but I have this as a " buy" at 212p - and a hacked Oakley style EPV from 370p-470p. VSA target 322p, Peel hunt (House broker) 350p. Interim results are expected about 19th September 2018, recent 6 month CAML production update is about on target too.

csh


DYOR, AIMHO etc. Oh and don't forget that political risk.

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Re: James Halstead JHD

#160744

Postby Bouleversee » August 20th, 2018, 12:56 pm

Lootman wrote:
Gengulphus wrote:
OLTB wrote:You need to be very careful as not all industries qualify for IHT relief, even if they are listed on AIM. In addition, if an AIM listed company that currently qualifies for IHT relief is taken over by a bigger fish, you may find out that the investment suddenly is non-qualifying!

To be more complete, suddenly becoming non-qualifying can also happen because the AIM company chooses to move to the main market - it doesn't require something as dramatic as a takeover. And not qualifying despite being on AIM can happen for reasons other than being in the wrong industry, the main one being that the company is not only on AIM, but also listed on a foreign 'recognised stock exchange' (in quotes because that's a technical tax term, i.e. don't try to interpret it yourself, but instead check HMRC's definition).

I have been running such a portfolio for about 7 years now. It consists of 20 shares and, in all that time, only two of them have ceased to be eligible (to my knowledge). In one case there was a takeover. In the other case, a change of exchange.

And when that does happen, you can sell and reinvest in another qualifying AIM share, thereby preserving the benefit.

So it's not been a big problem, so far. A bigger problem is that two of them have lost 80% of their value. But then two of them have increased 300% or more, hence the need for a good number of holdings.


Do you mean that you can buy another AIM share that is immediately IHT free, i.e. without having to wait for 2 years? I wasn't aware of that and it is good news as my holding in VCP has rocketed so much as the company expands that I do wonder if it will revert to the main market at some point. I presume there is some time limit for investing in a new share? Is there any similar concession for switching into an ISA, i.e. without paying cgt? My VCP holding used to be in my ISA till they went on AIM and I then had to transfer it out as AIM shares weren't allowed in ISAs at that time and for various reasons, including the cgt aspect, I never got around to transferring it back in after the law changed. I do now have ISA capacity, having inherited some of my husband's allowance, but cgt would still be an issue. I guess the answer will be "no".

As regards James Halstead, as it happens I do hold. I think we bought after reading John Lee's comments on his holding, many years ago, and I am aware that they have not done well recently but am not sufficiently informed/competent to understand why and what to do next so I will follow this thread with interest. This comment applies equally to James Latham.

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Re: James Halstead JHD [re CAML]

#160746

Postby PinkDalek » August 20th, 2018, 1:05 pm

cshfool wrote:For AIM you both might like to have a look at Central Asia Metals Limited (CAML) ...


Merely a suggestion but how about starting a new thread on this board, including your entire post but headed Central Asia Metals Limited (CAML), such that it may be easily found in the future (rather than being hidden within this Halstead topic)?

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Re: James Halstead JHD

#160752

Postby OLTB » August 20th, 2018, 1:40 pm

Bouleversee wrote:
Lootman wrote:
Gengulphus wrote:To be more complete, suddenly becoming non-qualifying can also happen because the AIM company chooses to move to the main market - it doesn't require something as dramatic as a takeover. And not qualifying despite being on AIM can happen for reasons other than being in the wrong industry, the main one being that the company is not only on AIM, but also listed on a foreign 'recognised stock exchange' (in quotes because that's a technical tax term, i.e. don't try to interpret it yourself, but instead check HMRC's definition).

I have been running such a portfolio for about 7 years now. It consists of 20 shares and, in all that time, only two of them have ceased to be eligible (to my knowledge). In one case there was a takeover. In the other case, a change of exchange.

And when that does happen, you can sell and reinvest in another qualifying AIM share, thereby preserving the benefit.

So it's not been a big problem, so far. A bigger problem is that two of them have lost 80% of their value. But then two of them have increased 300% or more, hence the need for a good number of holdings.


Do you mean that you can buy another AIM share that is immediately IHT free, i.e. without having to wait for 2 years? I wasn't aware of that and it is good news as my holding in VCP has rocketed so much as the company expands that I do wonder if it will revert to the main market at some point. I presume there is some time limit for investing in a new share? Is there any similar concession for switching into an ISA, i.e. without paying cgt? My VCP holding used to be in my ISA till they went on AIM and I then had to transfer it out as AIM shares weren't allowed in ISAs at that time and for various reasons, including the cgt aspect, I never got around to transferring it back in after the law changed. I do now have ISA capacity, having inherited some of my husband's allowance, but cgt would still be an issue. I guess the answer will be "no".

As regards James Halstead, as it happens I do hold. I think we bought after reading John Lee's comments on his holding, many years ago, and I am aware that they have not done well recently but am not sufficiently informed/competent to understand why and what to do next so I will follow this thread with interest. This comment applies equally to James Latham.


Hi Bouleversee

You can re-invest the proceeds into another BR qualifying company, not losing the IHT relief as long as the sale proceeds are reinvested within three years of the sale, and, both the original and replacement shares have been held for at least two out of the last five years in total.

Cheers, OLTB.

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Re: James Halstead JHD

#160758

Postby Bouleversee » August 20th, 2018, 2:06 pm

OLTB said:

You can re-invest the proceeds into another BR qualifying company, not losing the IHT relief as long as the sale proceeds are reinvested within three years of the sale, and, both the original and replacement shares have been held for at least two out of the last five years in total.

Cheers, OLTB.

I must be even dimmer than I had realised, because I can't see any concession in that. Taken literally, it would mean that if my VCP shares went on to the main market so I sold and immediately bought another AIM share with the proceeds and promptly died, IHT would still be payable on the whole of the proceeds, assuming my estate exceeded the IHT free limit. No cgt would be payable at that point but it never is on death anyway. And what about a cgt concession if I sold and bought new AIM shares?

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Re: James Halstead JHD [re IHT reinvestment relief]

#160768

Postby PinkDalek » August 20th, 2018, 2:39 pm

Bouleversee wrote:... Taken literally, it would mean that if my VCP shares went on to the main market so I sold and immediately bought another AIM share with the proceeds and promptly died, IHT would still be payable on the whole of the proceeds, assuming my estate exceeded the IHT free limit. No cgt would be payable at that point but it never is on death anyway.


Assuming the conditions are met, the replacement holdings would be deemed to have been owned for IHT Business Relief purposes since the original holding and should qualify for the same as relief previously (without having to wait another 2 years). This area has been discussed previously in more depth on TLF but I've no time to search for it pro tem (and such a search problem is further complicated by Tax issues not being discussed over at Taxes ;) )

Edit: I've found one of them which may need a study (it started as one of yours and developed into a variety of matters, including reinvestment relief):

viewtopic.php?f=49&t=4834&p=49514

And what about a cgt concession if I sold [VCP] and bought new AIM shares?


I'm not aware of one but if, say, VCP became disqualified, then (funds permitting) rather than sell you could invest in other unquoted shares to maintain Business Relief, without giving rise to CGT.

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Re: James Halstead JHD

#160793

Postby OLTB » August 20th, 2018, 4:06 pm

Bouleversee wrote: And what about a cgt concession if I sold and bought new AIM shares?


Hi Bouleversee

I've just had a look at the VCP (Victoria plc) chart on the Hargreaves website - wow, what a price rise over the last five years and no wonder you have a CGT issue! As I'm sure you're aware, you get an £11,700 allowance for CGT in this current year so you may just have to drip feed the VCP shares over into an ISA each new tax year... Another type of investment that allows you to avoid IHT and defer CGT are Enterprise Investment Schemes (EISs) but they are very different beasts and can be highly speculative (you probably don't want the worry or hassle).

Cheers, OLTB.

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Re: James Halstead JHD

#160794

Postby Gengulphus » August 20th, 2018, 4:07 pm

Bouleversee wrote:OLTB said:

You can re-invest the proceeds into another BR qualifying company, not losing the IHT relief as long as the sale proceeds are reinvested within three years of the sale, and, both the original and replacement shares have been held for at least two out of the last five years in total.

Cheers, OLTB.

I must be even dimmer than I had realised, because I can't see any concession in that. Taken literally, it would mean that if my VCP shares went on to the main market so I sold and immediately bought another AIM share with the proceeds and promptly died, IHT would still be payable on the whole of the proceeds, assuming my estate exceeded the IHT free limit. No cgt would be payable at that point but it never is on death anyway. And what about a cgt concession if I sold and bought new AIM shares?

I believe OLTB's intended meaning for "both the original and replacement shares have been held for at least two out of the last five years in total" wasn't "each of the original and replacement shares has separately been held for at least two out of the last five years", which would indeed not be a concession. Instead, I think it was "the holding periods of the original and replacement shares combine to make up at least two out of the last five years", which is a concession because it means e.g. that if the original shares had been held for two years already, the replacement shares immediately qualify, or if they'd been held for one year already, the replacement shares will only need to be held for one year to bring the combined holding period up to two years and so qualify. The words "in total" at the end were probably meant to indicate that combining of the holding periods.

I should say that I'm not entirely convinced that selling one AIM company that qualifies for business relief and buying another is a case to which the rule applies, as the HMRC manual page I've found on the subject indicates that the relevant tax law applies to corporate actions such as mergers, takeovers and share capital reorganisations rather than voluntary sales and purchases. On the other hand, its final paragraph indicates that HMRC do accept application of the rule to a particular case of voluntary sales and purchases - so I'm left uncertain about exactly what types of transaction it applies to, and when it does, whether it does so by tax law or by HMRC concession.

Note though that I'm not asking for answers to those questions, especially here (the Taxes board would be far better for the likely technicalities), and am only saying "not entirely convinced" and "uncertain", not that anything said here or elsewhere is wrong. I would certainly personally consider selling (*) shares in a qualifying AIM company that was going to transfer to the main market and using the proceeds to buy shares in another qualifying AIM company simply on the basis that if I don't, the holding period of the original share definitely won't count towards business relief, and if I do, it might. And I wouldn't try to resolve the question of whether it will now, because it only gets resolved according to the Inheritance Tax rules when I die, which might well have changed from now, and even if they haven't, the question is only relevant if I fail to survive for two years. I.e. it's a question best left to my executors because it may well never need answering at all, of if it does, the answer I get now may well no longer be relevant. All that it's sensible to do now is maximise the chances that it applies, e.g. by keeping the connection between the sales proceeds and the money used to buy the replacement shares as simple and straightforward as possible.

(*) Only "consider selling" rather than "definitely sell" because I don't want to trade down to a significantly less good company and/or (if not in tax shelters) incur a hefty CGT bill now for a possible future IHT saving that will only benefit my heirs, not me - I wish my heirs well (otherwise they wouldn't be my heirs!) but their interests come second to my own...

Gengulphus

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Re: James Halstead JHD

#160799

Postby Bouleversee » August 20th, 2018, 4:17 pm

Thanks, Geng. That makes more sense. And I meant selling because they had come out of AIM, of course. As you say, best discussed further on the tax board.

As regards Halstead, it has rather a high p/e ratio which I always find offputting.

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Re: James Halstead JHD

#160801

Postby PinkDalek » August 20th, 2018, 4:22 pm

Gengulphus wrote:... Note though that I'm not asking for answers to those questions, especially here (the Taxes board would be far better for the likely technicalities) ...


That would be a great post to replicate at Taxes.

Are you willing so to do, to kick off further discussion on the subject (if it isn't already covered on one of the four pages here viewtopic.php?f=49&t=4834&p=49514, which, having found, I've yet to read again but I recall it was taken off topic into discussing what Grant of Probate means as against IHT clearance)?

PD (acknowledging I mistakenly typed reinvestment as against replacement in my earlier reply)

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Re: James Halstead JHD

#160809

Postby Lootman » August 20th, 2018, 5:21 pm

OLTB wrote:As I'm sure you're aware, you get an £11,700 allowance for CGT in this current year so you may just have to drip feed the VCP shares over into an ISA each new tax year..

I've been gradually migrating my AIM shares from a taxable account to my ISA since that became allowable a few years ago. A few things I've experienced:

1) There is no stamp duty when repurchasing AIM shares. Nonetheless the bid-to-offer spreads are larger on AIM shares than listed shares, sometimes much larger. It's not impossible to lose up to 5% on the switch, so it's worth checking the spread before doing this. That spread can also vary over days or even time of the day. You might also try using limit orders for thinly-traded issues, or your broker may insist on that.

2) You need to decide whether you are going to repurchase the same number of shares or the same monetary amount. I have generally done the same number of shares if repurchasing the same AIM share, but the same monetary amount if repurchasing a different AIM share. I'm not saying that is the most efficient - only that it helps me with record-keeping. Obviously if you do it with the same share and the same monetary amount then you might go from having 5,000 shares to having 4,917 shares, or some such.

3) If it's a holding that has appreciated a lot then there is always a risk that it will lose money in your ISA, and then the loss is not allowable against other gains. It's annoying when that happens, and it has happened to me twice. AIM shares are volatile so the inability to utilise losses is a big deal for some investors. That said, it's an eternity portfolio if you want to enjoy the IHT benefits anyway.

4) Record-keeping. I'll bet that 90% of lay executors have no idea about the IHT exemption of (some) AIM shares, and so it is imperative to not only keep records but also ensure that your executors know about this. Being old school I do that on a large piece of paper with details of all purchases and repurchases. Ideally it might be best to have a separate account just for the qualifying AIM share positions so it is more obvious. It would be a tragedy after all this work if the exemption were not claimed, as I doubt that the probate office or HMRC would notice if you failed to claim it.

5) I only do a bed-and-ISA transaction when the position has already been held for 2 years or more, to keep the situation simple in terms of the rules (as I understand them).

6) It can be IHT-efficient to gift holdings of qualifying AIM shares, but you cannot do that from an ISA.

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Re: James Halstead JHD

#160826

Postby Gengulphus » August 20th, 2018, 6:52 pm

Lootman wrote:6) It can be IHT-efficient to gift holdings of qualifying AIM shares, but you cannot do that from an ISA.

I'm pretty certain you can, but they cannot keep the ISA tax shelter in the process. It's simply a matter of withdrawing the shares from the ISA followed by transferring them to the recipient. And unlike transfers into an ISA which can only be done for cash (*), withdrawals from an ISA can be done with any asset that can legitimately be in an ISA - no need for a bed-and-ISA type sell/transfer/repurchase rigmarole.

(*) And subject to a number of conditions, for shares obtained from some employee share schemes - but that's quite a rare case.

Gengulphus

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Re: James Halstead JHD

#160831

Postby Gengulphus » August 20th, 2018, 7:14 pm

PinkDalek wrote:
Gengulphus wrote:... Note though that I'm not asking for answers to those questions, especially here (the Taxes board would be far better for the likely technicalities) ...


That would be a great post to replicate at Taxes.

Are you willing so to do, to kick off further discussion on the subject (if it isn't already covered on one of the four pages here viewtopic.php?f=49&t=4834&p=49514, which, having found, I've yet to read again but I recall it was taken off topic into discussing what Grant of Probate means as against IHT clearance)?

I'm afraid I'm not willing to do so right now or in the near future, but that's not because of any objection to what I wrote appearing there. It's just that I can't really prioritise reading your linked thread, chasing up the tax law references in the HMRC pages or putting much effort into such a Taxes thread at present - as I said, I don't really need answers to such questions about IHT business relief and replacement assets at present!

So I would have absolutely no objections to you or anyone else starting such a thread and quoting what I wrote in it. I would suggest though that the start of my post (the quote of bouleversee's post and the first paragraph of my reply) would be out of context on a new Taxes thread, so probably best to only quote the rest of my reply, probably after an introductory paragraph.

And if anyone does, please post a link here so that those who are interested (who might well include me as a 'lurker') know it's there.

Gengulphus

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Re: James Halstead JHD

#160845

Postby Lootman » August 20th, 2018, 7:53 pm

Gengulphus wrote:
Lootman wrote:6) It can be IHT-efficient to gift holdings of qualifying AIM shares, but you cannot do that from an ISA.

I'm pretty certain you can, but they cannot keep the ISA tax shelter in the process. It's simply a matter of withdrawing the shares from the ISA followed by transferring them to the recipient.

Yes, that would work as far as I am aware. But I don't think it is ideal because you would permanently lose the value of that position from your tax shelter, and it cannot be replaced. (For much the same reason I never make withdrawals from my ISA, but rather only from my taxable account).

It might have been better for me to have said that IF it is your intention to eventually gift a qualifying AIM position (or perhaps any position) in the future THEN it is not an ideal choice for a bed-and-ISA transaction, at least if there are other candidates available.


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