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Legal & General (LGEN)
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- The full Lemon
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Re: Legal & General (LGEN)
I think it is good for a top up. This is a company with an excellent record and good culture. I am looking forward to a nice four figure dividend on Thursday.
Dod
Dod
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- Lemon Quarter
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Re: Legal & General (LGEN)
Dod101 wrote:I think it is good for a top up. This is a company with an excellent record and good culture. I am looking forward to a nice four figure dividend on Thursday.
Dod
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i have 9000 lLGEN - planning to round up to 10000 soon.
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- Lemon Slice
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Re: Legal & General (LGEN)
Thanks all for this thread. I took a look at LGEN over the weekend and bought today with the intention of a long term hold.
Pendrainllwyn
Pendrainllwyn
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Re: Legal & General (LGEN)
I don't have any particular knowledge of or insight into LGEN. I don't know anyone who has worked there, I don't use their products. I have no crystal ball. You can tell by now that I am in no position to recommend the stock! Anyway, it looks reasonably priced to me so I have bought. Below is what I like about it. (Please note in the numbers I use below I have only looked back to 2010. No doubt things would look quite different if I looked back through the global financial crisis).
Since 2010, Book Value has grown from 4.2BN to 8.6BN or 104.5%. Meanwhile the number of shares in issue has gone up only 1.7% leading to book value per share growth of 100% over 8 years. Reassuringly book value per share has gone up in every one of those 8 years. Steady as she goes.
Despite a growing book value LGEN ROE has seen growth in 6 of 8 years. In 2018 it came down to a still healthy 22%. Book value has also grown despite a healthy dividend payout. Dividend growth every year since 2010 and a healthy yield today around 6.3%.
LGEN has a relatively low PE ratio around 9, below where it is has generally traded since 2010.
I like that LGEN has a diversified business (all 5 of their business segments saw revenue growth in 2018. 3 segments saw strong growth, the other 2 saw marginal 2% growth) and they have some strong market shares.
I am reassured by the comments below on culture which I agree is important. No doubt Brexit is a dark cloud hanging over UK domestic stocks in general and no doubt there are other risks known and unknown but I have decided to take the plunge. The first two days of ownership have been kind to me - which is highly unusual! Again, not a recommendation from me but happy to hear alternative views.
Pendrainllwyn
Since 2010, Book Value has grown from 4.2BN to 8.6BN or 104.5%. Meanwhile the number of shares in issue has gone up only 1.7% leading to book value per share growth of 100% over 8 years. Reassuringly book value per share has gone up in every one of those 8 years. Steady as she goes.
Despite a growing book value LGEN ROE has seen growth in 6 of 8 years. In 2018 it came down to a still healthy 22%. Book value has also grown despite a healthy dividend payout. Dividend growth every year since 2010 and a healthy yield today around 6.3%.
LGEN has a relatively low PE ratio around 9, below where it is has generally traded since 2010.
I like that LGEN has a diversified business (all 5 of their business segments saw revenue growth in 2018. 3 segments saw strong growth, the other 2 saw marginal 2% growth) and they have some strong market shares.
I am reassured by the comments below on culture which I agree is important. No doubt Brexit is a dark cloud hanging over UK domestic stocks in general and no doubt there are other risks known and unknown but I have decided to take the plunge. The first two days of ownership have been kind to me - which is highly unusual! Again, not a recommendation from me but happy to hear alternative views.
Pendrainllwyn
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- Lemon Half
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Legal & General (LGEN)
"Insurer Legal & General has racked up another £20.6m of losses on its venture building pre-fabricated homes.
Accounts for the unit, founded in late 2015, show cumulative losses of almost £76m. The insurer pumped in a further £23.2m during 2018, and accounts show it has now injected more than £90m in total into the business."
https://www.thetimes.co.uk/article/loss ... -8062ghzr2
"L&G said: “In common with many other engineering product-based businesses, our business plans [foresaw] a number of years of upfront investment would be required to develop the products and processes required to enable the business to deliver profitably at scale. ”
Accounts for the unit, founded in late 2015, show cumulative losses of almost £76m. The insurer pumped in a further £23.2m during 2018, and accounts show it has now injected more than £90m in total into the business."
https://www.thetimes.co.uk/article/loss ... -8062ghzr2
"L&G said: “In common with many other engineering product-based businesses, our business plans [foresaw] a number of years of upfront investment would be required to develop the products and processes required to enable the business to deliver profitably at scale. ”
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- The full Lemon
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Re: Legal & General (LGEN)
That is one thing that concerns me about L & G, that they are not just funding the building of housing (and other infrastructure projects) but now own some contractors. For instance they recently bought Cala Homes in Scotland as well as this maker of prefabs. I would have thought that their business was complicated enough not to need the further complication of running contractors. So far the sums involved are not significant but they do wrack up.
They seem to be doing a bit of a Warren Buffet because these are presumably investment funds to back up their life and pensions liabilities.
Dod
They seem to be doing a bit of a Warren Buffet because these are presumably investment funds to back up their life and pensions liabilities.
Dod
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- Lemon Half
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Re: Legal & General (LGEN)
https://www.legalandgeneral.com/modular/our-homes/
I'm quite keen on what is being done...I think it will, long term, be beneficial to LGEN. Their objective ( see "vision" in the link) is admirable.
Possible outcomes
- increases supply of houses to a market that needs quality product ( there are certain housebuilders that don't seem capable of the quality side but their CEOs are 'doing ok thank you very much')
- the process offers tailoring of the houses and environment for clients for what they describe as " later living"...we'll sort your pension and would you like to look at one of our purpose designed houses whilst you're here?
- the product and production process is scalable... if successful, duplicate the factory.
- volume increases will lead to cost savings
- manufacturing time and build time better than traditional routes
- easy to transfer to other markets / countries.
- increases reputation of LGEN to the general populous ( assuming quality at a reasonable cost )
- creates new jobs, tax
I'm quite keen on what is being done...I think it will, long term, be beneficial to LGEN. Their objective ( see "vision" in the link) is admirable.
Possible outcomes
- increases supply of houses to a market that needs quality product ( there are certain housebuilders that don't seem capable of the quality side but their CEOs are 'doing ok thank you very much')
- the process offers tailoring of the houses and environment for clients for what they describe as " later living"...we'll sort your pension and would you like to look at one of our purpose designed houses whilst you're here?
- the product and production process is scalable... if successful, duplicate the factory.
- volume increases will lead to cost savings
- manufacturing time and build time better than traditional routes
- easy to transfer to other markets / countries.
- increases reputation of LGEN to the general populous ( assuming quality at a reasonable cost )
- creates new jobs, tax
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- The full Lemon
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Re: Legal & General (LGEN)
Just as long as it makes money I do not mind but certainly the prefabs are not at the moment. And they are not a charity nor a local housing association.
Dod
Dod
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Re: Legal & General (LGEN)
I approve of L&G investing in real things and businesses, not just financial assets, in order to support their long term annuity/pension liabilities.
I have held these for a long time, having bought on average at less than 100p and some of it a lot less than that. The Stock Market does seem to regard these financial businesses as having above average risk, hence the low ratings. It is difficult to determine just how risky such businesses are. All can seem well for decades until the brown stuff hits the fan!
My concern would be that they have built up an absolutely massive annuity book which may be fine, but if something causes a large increase in longevity or if returns long term fail to match the index linked liability of pensions, then watch out!
My holding is small relatively for the above reasons.
I have held these for a long time, having bought on average at less than 100p and some of it a lot less than that. The Stock Market does seem to regard these financial businesses as having above average risk, hence the low ratings. It is difficult to determine just how risky such businesses are. All can seem well for decades until the brown stuff hits the fan!
My concern would be that they have built up an absolutely massive annuity book which may be fine, but if something causes a large increase in longevity or if returns long term fail to match the index linked liability of pensions, then watch out!
My holding is small relatively for the above reasons.
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- The full Lemon
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Re: Legal & General (LGEN)
Half yearly results; https://www.investegate.co.uk/legal---3 ... 00041618I/
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- 2 Lemon pips
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Re: Legal & General (LGEN)
Thanks Ian
I note that the dividend increase is 7.17% so some good news in these markets.
I note that the dividend increase is 7.17% so some good news in these markets.
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- The full Lemon
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Re: Legal & General (LGEN)
Very good results and the interim dividend is up well too. Seems to be the best of the three financials to report this morning with Standard Life Aberdeen the poorest, although moving in the right direction and Phoenix doing fine as well. Note that the increase in AUM is at 15%, the highest of all three companies by a margin.
I hold L & G and Phoenix and I must say that L & G is, like Unilever, one of my core holdings.
Thanks Ian. Keep up the good work! We should all be very grateful to you.
Dod
I hold L & G and Phoenix and I must say that L & G is, like Unilever, one of my core holdings.
Thanks Ian. Keep up the good work! We should all be very grateful to you.
Dod
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- Lemon Quarter
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Re: Legal & General (LGEN)
I too like and hold LGEN, but wonder should they be sticking to their knitting, rather than dabbling in construction. I am less worried by them providing funds to support infrastructure projects, but don't like the idea of their direct involvement in construction.
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- The full Lemon
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Re: Legal & General (LGEN)
richfool wrote:I too like and hold LGEN, but wonder should they be sticking to their knitting, rather than dabbling in construction. I am less worried by them providing funds to support infrastructure projects, but don't like the idea of their direct involvement in construction.
Yes That is what I was getting at in my earlier response. I think they have enough on their plate without getting directly involved in the housebuilding industry, trying to take executive decisions in running things like Cala and building prefabs.
The losses are small beer to them though and their results are very good, I think.
Dod
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- Lemon Quarter
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Re: Legal & General (LGEN)
They just took over running my company DB pension scheme (i.e. insuring the benefits).
It seems L&G will be paying my pension rather than my old company.
Luckily the pension fund is currently in surplus.
I don't know whether to be pleased or worried!
FD
It seems L&G will be paying my pension rather than my old company.
Luckily the pension fund is currently in surplus.
I don't know whether to be pleased or worried!
FD
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- The full Lemon
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Re: Legal & General (LGEN)
funduffer wrote:They just took over running my company DB pension scheme (i.e. insuring the benefits).
It seems L&G will be paying my pension rather than my old company.
Luckily the pension fund is currently in surplus.
I don't know whether to be pleased or worried!
FD
Surely it ought to be neutral for you, and the pension fund trustees will no doubt have done their due diligence. Hope you've got shares in L & G! (or maybe not; that is simply building your exposure to the Company)
Dod
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- Lemon Half
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Re: Legal & General (LGEN)
There was an article on LGEN's modular housing in The Times today.
https://www.thetimes.co.uk/article/home ... -bvghlm6lp
" is one of the most ambitious diversifications attempted by the FTSE 100 insurer. And after some bumps in the road since it was announced in 2016, he ( Mr Wilson)is confident that things are about to take off."
"L&G has big ambitions for the plant, targeting 10,000 modules or 3,500 homes a year (a home can be a single module or several joined together)."
"Even so, only eight finished homes have been delivered so far"
"there’s a wide range of people who are very interested”, from councils to housing associations to private developers"
"Pressed on when the factory would start to make a profit, he ( Wilson) promised: “It’ll be quicker than five years.” Revenues would soar as the plant scaled up from one shift per day to three shifts"
"the subsidiary lost another £20.6 million last year, taking accumulated losses to almost £76 million"
3000 houses at ,say £150k each and with a margin of 20%...approx £90m per annum...assumes LGEN can convince people that these are NOT pre-fabs! Well, not really
https://www.thetimes.co.uk/article/home ... -bvghlm6lp
" is one of the most ambitious diversifications attempted by the FTSE 100 insurer. And after some bumps in the road since it was announced in 2016, he ( Mr Wilson)is confident that things are about to take off."
"L&G has big ambitions for the plant, targeting 10,000 modules or 3,500 homes a year (a home can be a single module or several joined together)."
"Even so, only eight finished homes have been delivered so far"
"there’s a wide range of people who are very interested”, from councils to housing associations to private developers"
"Pressed on when the factory would start to make a profit, he ( Wilson) promised: “It’ll be quicker than five years.” Revenues would soar as the plant scaled up from one shift per day to three shifts"
"the subsidiary lost another £20.6 million last year, taking accumulated losses to almost £76 million"
3000 houses at ,say £150k each and with a margin of 20%...approx £90m per annum...assumes LGEN can convince people that these are NOT pre-fabs! Well, not really
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- Lemon Slice
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Re: Legal & General (LGEN)
I have a holding in LGEN and am thinking of increasing it, I think it's a very solid investment.
In this week's Investors Chronical it's rated a buy in it's share tips section. https://www.investorschronicle.co.uk/ti ... too-cheap/
MM
In this week's Investors Chronical it's rated a buy in it's share tips section. https://www.investorschronicle.co.uk/ti ... too-cheap/
MM
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- The full Lemon
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Re: Legal & General (LGEN)
I have held it for more than 20 years and too think it is solid but I am a bit concerned about its entry into manufacturing houses, and some of the other infrastructure stuff. However assuming that its dividend is secure it is surely under priced even after the uplift on Friday.
Dod
Dod
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