Greggs Plc (GRG)

[torata]

...has been a great share in every respect.

Bought as a half-share holding maybe 8 years ago, but now sitting at 156% of my median share value with a forecast yield of 2.6%.

9% yield on cost, but my finger is hovering over the sell button to top-slice down to 100% (I usually top slice at around 175%~180%)

torata

[Dod101]

Does not sound very like a HYP share though and neither do your thoughts , however a good share it may be by 'normal' criterion.

Dod

[Itsallaguess]

...has been a great share in every respect.

Bought as a half-share holding maybe 8 years ago, but now sitting at 156% of my median share value with a forecast yield of 2.6%.

9% yield on cost, but my finger is hovering over the sell button to top-slice down to 100% (I usually top slice at around 175%~180%)

A forecast yield of 2.1% according to Digital Look -



https://www.sharecast.com/equity/Greggs

This is a classic case of why using a '9% yield on cost' metric can be utterly deceptive, and can cloud judgement over what really matters to income-seekers...

Personally, and looking at the chart over recent months (https://tinyurl.com/yy43ub88), I'd be top-slicing a large part of what is now 'low-income capital', and rotating it into something that will earn you probably double the income that it's currently delivering for you. Doing so will also lock in some of the recent capital profits you've seen - never a bad thing to do in these situations.

If this were me, I'd most probably rotate into an Investment Trust of some sort at this current time, where you can probably easily achieve double the income whilst at the same time removing almost completely the single-company risk that this top-slice capital is currently exposing itself to, but that's OT for this board and I won't expand on that point here.

My main point was to highlight how focussing on a '9% yield on cost' figure is both pointless and dangerous - it provides nothing but a comfort-blanket that is likely to cloud critical investment-judgement...

Overall though, a nice problem to have....so good luck with your decision, whichever way you go.

Cheers,

Itsallaguess

[TahiPanasDua]

, I'd be top-slicing a large part of what is now 'low-income capital', and rotating it into something that will earn you probably double the income that it's currently delivering for you.
Cheers,

Itsallaguess

It's been a great share over the years and I think your recommendation to rotate a top slice into an IT seems to make sense. But hasn't it always been a bit of a low yielder and don't the rising payouts as the price increases negate that a bit?

I am torn as my other "banker" low yielders such as ULVR, RB., and DGE have been similar stalwarts on capital appreciation over the years. As a result, concerns over initial low dividends have been diminished by steady annual dividend increases. That are still low yielders but I don't feel tempted to take sell any. Greggs are not nearly as diversified as the above 3 so maybe a part sale is justified? Mmmm........

TP2.

[IanTHughes]

In my opinion, over the last 8 years, Greggs PLC (GRG) has only briefly been a candidate for HYP, which was in August 2013, less than 6 years ago, when the historical yield touched 5.00%. I remember briefly considering it for my HYP at the time, but in the end my money went elsewhere. Anyone who did purchase it 8 years ago - in 2011 - would have been buying a rather paltry yield of 3.75%, as can be seen here:

https://www.dividenddata.co.uk/dividend ... y?epic=GRG

Indeed, plugging the historical price and dividend information into my HYP Spreadsheet shows that a purchase made eight years ago - February 2011 - would have produced an impressive capital gain. Yes, income has been steady and, latterly at least, increasing. But hardly impressively, especially if one counts the Special Dividend of £0.20 paid in July 2015 as a return of capital.

Hardly HYP in my view.


Ian

[CryptoPlankton]

...has been a great share in every respect.

Bought as a half-share holding maybe 8 years ago, but now sitting at 156% of my median share value with a forecast yield of 2.6%.

9% yield on cost, but my finger is hovering over the sell button to top-slice down to 100% (I usually top slice at around 175%~180%)

This is a classic case of why using a '9% yield on cost' metric can be utterly deceptive, and can cloud judgement over what really matters to income-seekers...

That seems a bit much. I don't see any clouding of judgement - the OP mentioned the yield on cost (presumably as simply a point of interest), but has also clearly explained their strategy which, if I understand it correctly, is not influenced by that figure at all.

Personally, and looking at the chart over recent months (https://tinyurl.com/yy43ub88), I'd be top-slicing a large part of what is now 'low-income capital', and rotating it into something that will earn you probably double the income that it's currently delivering for you. Doing so will also lock in some of the recent capital profits you've seen - never a bad thing to do in these situations.

Isn't that exactly what the OP is planning to do? Their strategy is to top slice at 175%-180% median share value and it is currently at 156% with their finger "hovering over the sell button". You may have a different rule for top-slicing, but their's seems perfectly reasonable. In the meantime, given the starting yield was probably 4 or 5% (having checked the historical yield chart) and the dividend has a five-year growth rate of 10%, I don't see any reason to break their usual rule - such shares are always handy if you want to keep ahead of inflation.

If this were me, I'd most probably rotate into an Investment Trust of some sort at this current time, where you can probably easily achieve double the income whilst at the same time removing almost completely the single-company risk that this top-slice capital is currently exposing itself to, but that's OT for this board and I won't expand on that point here.

It is OT and I saw someone censured for it only the other day, but I guess it depends who you are...

My main point was to highlight how focussing on a '9% yield on cost' figure is both pointless and dangerous - it provides nothing but a comfort-blanket that is likely to cloud critical investment-judgement...

It was mentioned in passing by the OP, but I'd suggest the only "focussing" has been by you and you wrongly attributed it to them.

Does not sound very like a HYP share though and neither do your thoughts...

The OP said they bought "maybe 8 years ago" - the yield varied from 3.75% - 5% around that time so it could easily have been in HYP territory at the time of purchase. As for the thoughts, aren't they similar to the likes of TJH's top-slicing strategy, is that not HYP?

Torata's post seemed perfectly reasonable and uncontroversial to me, but it does seem to be getting increasingly difficult to say anything around here without some unnecessarily negative response. Still, there is a sure fire strategy to avoid that and, having foolishly stuck my head above the parapet myself, I shall now revert to employing it...

[Arborbridge]

Torata's post seemed perfectly reasonable and uncontroversial to me, but it does seem to be getting increasingly difficult to say anything around here without some unnecessarily negative response. Still, there is a sure fire strategy to avoid that and, having foolishly stuck my head above the parapet myself, I shall now revert to employing it...

Well, your response to IAAG does seem to be a bit negative in itself

What he said seemed pretty reasonable, so I was a bit suprised at your taking up cudgels. After all, he made the point himself that his main interest was in highlighting the potential problem which might occur paying too much attention to this false positive of yield on cost. I've done it myself and frankly admit it's only a comfort blanket as he said.

Beats me why you bothered.


Arb.

[IanTHughes]

...has been a great share in every respect.

Bought as a half-share holding maybe 8 years ago, but now sitting at 156% of my median share value with a forecast yield of 2.6%.

9% yield on cost, but my finger is hovering over the sell button to top-slice down to 100% (I usually top slice at around 175%~180%)

….. given the starting yield was probably 4 or 5% (having checked the historical yield chart)

Well all I can say is that you have not checked very carefully. A detailed study of the share price lows and highs in the first three months of 2011, in other words eight years ago, together with the then latest dividend, shows that the Historical Yield at the point of purchase would have been somewhere between 3.16% and 3.84%. If one assumes that the forecast dividend was indeed the value that came about, then the Forecast Yield at the point of purchase would have been somewhere between 3.46% and 4.20%. As I said before, the Historical Yield only touched upon 5.00% very briefly, and this was in August 2013, less than 6 years ago.

In my view, whilst obviously Greggs PLC (GRG) has turned out to be an excellent choice for a Value Portfolio eight years ago, and I congratulate torata on its selection, it was not at that time a choice for HYP, and since then has only been a possible HYP selection for a brief few weeks.


Ian

[Itsallaguess]

This is a classic case of why using a '9% yield on cost' metric can be utterly deceptive, and can cloud judgement over what really matters to income-seekers...

That seems a bit much. I don't see any clouding of judgement - the OP mentioned the yield on cost (presumably as simply a point of interest), but has also clearly explained their strategy which, if I understand it correctly, is not influenced by that figure at all.

Hi CP,

We must be reading different words, then.

When someone says -

"9% yield on cost, but my finger is hovering over the sell button"

it tells me that they are thinking about selling/top-slicing, but being pulled back from that decision by the earlier '9% yield on cost' attribution.

I stand by my point that if that's the case, then they are basing that decision not to sell anything on a statistical comfort-blanket, and nothing more....

You say, having read the same post yourself, that they are 'not influenced by that figure at all' - but I'd have to ask - why was it mentioned then?

I'm sorry that you saw my response as being negative, but I stand by all the points raised in my post, and see it more as constructive critical discussion, rather than it simply being a negative post for the sake of it....

Cheers,

Itsallaguess

[GoSeigen]

I'd be top-slicing a large part of what is now 'low-income capital', and rotating it into something that will earn you probably double the income that it's currently delivering for you. Doing so will also lock in some of the recent capital profits you've seen - never a bad thing to do in these situations.

Nice to see this board is open to non-HYP discussion at last!


GS

[CryptoPlankton]

This is a classic case of why using a '9% yield on cost' metric can be utterly deceptive, and can cloud judgement over what really matters to income-seekers...

That seems a bit much. I don't see any clouding of judgement - the OP mentioned the yield on cost (presumably as simply a point of interest), but has also clearly explained their strategy which, if I understand it correctly, is not influenced by that figure at all.

Hi CP,

We must be reading different words, then.

When someone says -

"9% yield on cost, but my finger is hovering over the sell button"

it tells me that they are thinking about selling/top-slicing, but being pulled back from that decision by the earlier '9% yield on cost' attribution.

Without context, I would possibly agree, but when you don't truncate that sentence you get "hovering over the sell button to top-slice down to 100% (I usually top slice at around 175%~180%)", this just after saying that the share is "now sitting at 156% of my median share value with a forecast yield of 2.6%". That tells me they are hovering because they are thinking of selling even BEFORE their normal sell signal is reached (possibly because the current yield is low?) - but NOT at all that they are holding back because of the yield on cost. Anyway, I should probably have kept my thoughts to myself and will endeavour to do so henceforth (I'm sure torata will comment on your reply if he/she feels the need). I think perhaps the best thing for me to do is to try a "No-look '19" ( ) as far as TLF is concerned - I struggle not to comment sometimes when I'm reading stuff (a lot of the content seems to wind me up these days) and that invariably leads to a lot of wasted time and energy on pointless exchanges.

Apologies and happy HYPing to all...

[torata]

Without context, I would possibly agree, but when you don't truncate that sentence you get "hovering over the sell button to top-slice down to 100% (I usually top slice at around 175%~180%)", this just after saying that the share is "now sitting at 156% of my median share value with a forecast yield of 2.6%". That tells me they are hovering because they are thinking of selling even BEFORE their normal sell signal is reached (possibly because the current yield is low?) - but NOT at all that they are holding back because of the yield on cost.

CryptoPlankton is correct. I made the decision to top-slice back down to 100% ahead of my usual %.

After I'd posted I realized (and as Itsallaguess correctly pointed out) the forecast yield had decreased to 2.1% after the price rise post results, so the decision was even easier.

I bought in fact in Aug 2011, and the yield was 4.something%. IIRC, at the time it was being discussed or highlighted as a possible HYP share on TMF boards. That will have been why I looked into it in the first place as that was when I was repositioning my ISA into an HYP.

torata

[Raptor]

Moderator Message:
I have looked at this thread and cannot see any "company news" in it. Will move to the "shares" forum. Raptor.

[CryptoPlankton]

Moderator Message:
I have looked at this thread and cannot see any "company news" in it. Will move to the "shares" forum. Raptor.

Am I the only person to think that's a strange decision? It wasn't on the "company news" board but HYP Practical where, in the context of a HYP, surely discussion about top-slicing a holding is on topic? There are numerous threads about buying, selling, topping up or top-slicing shares in HYPs on the board, are they all OT too?

Thank goodness my understanding of the OP has been confirmed, otherwise I'd be starting to seriously question my grasp on reality!

Ever feel you're in the wrong place...?

[torata]

Moderator Message:
I have looked at this thread and cannot see any "company news" in it. Will move to the "shares" forum. Raptor.

Am I the only person to think that's a strange decision? It wasn't on the "company news" board but HYP Practical where, in the context of a HYP, surely discussion about top-slicing a holding is on topic? There are numerous threads about buying, selling, topping up or top-slicing shares in HYPs on the board, are they all OT too?

Thank goodness my understanding of the OP has been confirmed, otherwise I'd be starting to seriously question my grasp on reality!

Ever feel you're in the wrong place...?

I am also somewhat bemused. It was posted as an HYP topic. There are other ex-HYP shares that are discussed on the HYP Practical board.
But at least there's a 'trace' link (what ever its called) on HYP Practical if others who hold Greggs as an HYP share want to follow up.

Thanks for moving it from Company News, Raptor, as it clearly was not the right place.

torata

[Gengulphus]

Moderator Message:
I have looked at this thread and cannot see any "company news" in it. Will move to the "shares" forum. Raptor.

Am I the only person to think that's a strange decision? It wasn't on the "company news" board but HYP Practical ...

The thread was on the Company Share News board when I saw it yesterday. So I think it's been moved twice, first from HYP Practical to Company Share News (without a moderator comment about the move), then on to Share Ideas (with one).

I won't comment on how that might have happened or on whether the moves were justified, because of the TLF site policy described here.

Gengulphus

[torata]

The thread was on the Company Share News board when I saw it yesterday. So I think it's been moved twice, first from HYP Practical to Company Share News (without a moderator comment about the move), then on to Share Ideas (with one).

That is correct.
There remains a 'trace' from HYP Practical board so HYPers can find it if they want to, so let's leave it there.

torata

[westmoreland]

it's a solid business, with good returns on capital. it is loved by many of their customers, and their prices are cheap. they could raise them IMO.

i considered buying it at a 3% yield, but decided not to for the following reasons.

it has expanded quite dramatically in recent years, to such an extent that any future downturn in the economy will translate to more pronounced falls in profit than if it had fewer stores. some areas near me have multiple stores in very close proximity to each other. to sustain this level of roll out, you are reliant on many more fickle customers.

it's now operating in a hyper competitive market. they do have something special but it hasn't reached a valuation level in recent years that makes it an obvious buy. it's riding the crest of a wave of optimism at the moment, so i don't see particularly great returns going forwards.

[Itsallaguess]

9% yield on cost

I meant, in one of my earlier replies, to link to an example calculation-post that I've constructed in the past, which helps to explain why using 'yield on cost' metrics to guide investment decisions can be quite dangerous.

Without wishing to labour the points I've made earlier in this thread regarding this subject, I'd like to wrap up my own contribution by providing a link to that example-post here, for anyone who might not be quite aware of the potential issues around this particular metric -

https://www.lemonfool.co.uk/viewtopic.php?t=5031&start=20#p54230

The final sentence of the above linked post says this, and I stand by this point in particular -

What interests me is how my capital is performing today against possible alternatives to where it might work better for me, not how it's performing today compared to when I committed it all those years ago....

Cheers,

Itsallaguess

[CryptoPlankton]

9% yield on cost

I meant, in one of my earlier replies, to link to an example calculation-post that I've constructed in the past, which helps to explain why using 'yield on cost' metrics to guide investment decisions can be quite dangerous.

Without wishing to labour the points I've made earlier in this thread regarding this subject, I'd like to wrap up my own contribution by...

And I'd like to wrap up mine by apologising for my OTT reply to your first post. Although the OP really wasn't dithering because of the yield on cost (they were actually thinking of top-slicing before their usual signal), I can see how you could have interpreted the post otherwise and, as Arb suggested, my "negative" reply wasn't at all helpful. Indeed, torata had the good grace to not raise any objection to yours, or Dod's, critical posts so I had no place wading in. No excuse, but having had a stressful time in real life lately, I saw what I perceived as unjust responses to a perfectly reasonable post and bit. I think it was the culmination of a growing sense I've had that the site seems to have become far more confrontational and a less welcoming place to express thoughts and ideas. However, it may just be me and, in any case, I've certainly learnt that I shouldn't come anywhere near the boards when I have real life issues - there are far more effective ways to relax! I'll leave it at that as this is certainly going OT for Share Ideas, Company News, HYP Practical or whichever board this thread is on today...

FWIW, I agree wholeheartedly with all you said on the subject of yield on cost (that is except the context in which you brought it up!)

Apologies again,

CP