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Centrica Final Results

Practical discussions about equity High-Yield Portfolios (HYP) for income
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moorfield
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Re: Centrica Final Results

#34517

Postby moorfield » February 25th, 2017, 11:06 pm

77ss wrote:
I might not pick Centrica as a new purchase, when building up an HYP, but as a top-up to a mature HYP I see no problem. We are not all coming from the same place.


How does a CNA share know its being added as a new purchase or a top-up ? :? Does it care? :(

tjh290633
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Re: Centrica Final Results

#34518

Postby tjh290633 » February 25th, 2017, 11:06 pm

Centrica were discarded when they split off from British Gas, because my then PEP provider did not include them in their list of approved shares.

I might otherwise have kept them, but based on my own experience with CNA, t/a British Gas, they are not a company in which I have much faith. I moved away from them to EDF for my gas supply because they were uncompetitive. I think that there are better retail energy companies, and I hold SSE, having previously held Energy (split out of Hanson), which was taken over, moved into Scottish Power, again taken over, and am now with SSE.

The other company split out of British Gas, or BG Group as it became, was Lattice which merged into National Grid. And of course RDSB now owns BG., which I sold because of low yield, so we end up going round in circles.

TJH

Itsallaguess
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Re: Centrica Final Results

#34530

Postby Itsallaguess » February 26th, 2017, 6:54 am


Didn't Centrica have a rights-issue a relatively short while back?

Cheers,

Itsallaguess

77ss
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Re: Centrica Final Results

#34534

Postby 77ss » February 26th, 2017, 7:55 am

Itsallaguess wrote:Didn't Centrica have a rights-issue a relatively short while back?

Cheers,

Itsallaguess


Back in 2008/9.

But perhaps you are thinking of last year's £750m issuance of new shares to institutions? The ordinary investor didn't get a look-in.

Arborbridge
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Re: Centrica Final Results

#34535

Postby Arborbridge » February 26th, 2017, 7:56 am

Terry the Wizard is correct about topups. Pyad answered this question directly: that normal criteria should apply to topups as to initial purchases. That was also Luni's interpretation.

However, like being a Christian, it's a hard road to tread. The HYPer's prayer: "Make me PYADic, but not just yet".
As 77ss says, it is your portfolio, and it's up to you what you do - but if you do (topup and forget the guidelines) what you cannot claim is to be running a HYP according to the classic description.

Most of us wouldn't wait five years, and there would be a spectrum of views. I guess most would want some evidence of the dividends increasing again, or would rationalise and argue it's best to buy while the price is depressed. Personally, I'm so shambolic about keeping records of dividend cuts that I would probably topup anyway. That is, unless someone on the boards had kindly reminded me that there had been one.

So, in short, unless the memory of a severe cut is seared into my soul, I probably wouldn't be aware that I had sinned.

Yes, and I definitely topped up CNA since the cut.

Itsallaguess
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Re: Centrica Final Results

#34538

Postby Itsallaguess » February 26th, 2017, 8:16 am

77ss wrote:
Itsallaguess wrote:
Didn't Centrica have a rights-issue a relatively short while back?

Cheers,

Itsallaguess


Back in 2008/9.

But perhaps you are thinking of last year's £750m issuance of new shares to institutions? The ordinary investor didn't get a look-in.


Yes, it was the £750m new shares last year that I was thinking about.

Lots of talk here about dividend cuts, but share-dilutions such as that should also be taken into account as well, I think, and taking both of those issues into consideration has put me off getting into Centrica over recent years, and would also stop me topping up for now as well.

Cheers,

Itsallaguess

monabri
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Re: Centrica Final Results

#34550

Postby monabri » February 26th, 2017, 9:45 am

Some of the replies to Terry's question along the lines of "topping up if you already hold but not adding if you don't"
seem to be at odds! Maybe a resolution to this would long the lines of "add or buy new after a few years of showing that the company is back on track regarding - in our case - dividends"?
In the meantime, either set aside cash or - more likely- invest elsewhere.
To buy "now" must either be a contrarian view/leap of faith or a knowledge that a previous hiccup was due to a one off event, perhaps beyond the companies control or simply a top up for top up sake.

Raptor
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Re: Centrica Final Results

#34556

Postby Raptor » February 26th, 2017, 9:59 am

monabri wrote:Some of the replies to Terry's question along the lines of "topping up if you already hold but not adding if you don't"
seem to be at odds! Maybe a resolution to this would long the lines of "add or buy new after a few years of showing that the company is back on track regarding - in our case - dividends"?
In the meantime, either set aside cash or - more likely- invest elsewhere.
To buy "now" must either be a contrarian view/leap of faith or a knowledge that a previous hiccup was due to a one off event, perhaps beyond the companies control or simply a top up for top up sake.


I think you have made an assumption there. I believe that "most" of those saying they "would" not preclude CNA from a top-up would have criteria in place that if CNA met those criteria they would not exclude CNA because it cut in 2015. If I was looking to top-up and CNA came through as the "best" of those in line for some additional funds, then the cut in 2015 would not on its own preclude them as long as since then they were going in the right direction or my "research" showed the intent to increase the yield going forward.

Fortunately (or unfortunately) I have no funds readily available for top-up at the moment (big building project coming up shortly).

Raptor.

JohnnyCyclops
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Re: Centrica Final Results

#34665

Postby JohnnyCyclops » February 26th, 2017, 7:35 pm

One challenge around the "top-up vs buy fresh" line is that for a mature HYP, i.e. one where its owner considers their HYP to have a sufficient number of stocks in a reasonable mix of sectors, is the risk of proliferation in eschewing a borderline or suboptimal top-up and instead adding an additional holding of a new stock but still in the same sector.

In this way, over time one might start with Company A in a sector, and a little while later add to it Company B, and then further on Company's C, D, E, ... nn until the sector runs out of suitable HYP candidates. And over time a target number or range of stocks for the HYP will be exceeded unless some of the earlier companies/holdings are sold out (presumably on the weakness of their then HYP criteria.

The middle ground is not to top-up but also not to sell. However, where new funds are regularly being invested (or dividends reinvested) that risks getting the sector balance out of kilter by exluding for some time a stock from further top-ups.

No easy answers, and probably each to their own.

77ss
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Re: Centrica Final Results

#34696

Postby 77ss » February 26th, 2017, 9:51 pm

JohnnyCyclops wrote:One challenge around the "top-up vs buy fresh" line is that for a mature HYP, i.e. one where its owner considers their HYP to have a sufficient number of stocks in a reasonable mix of sectors, is the risk of proliferation in eschewing a borderline or suboptimal top-up and instead adding an additional holding of a new stock but still in the same sector.


Spot on. That is exactly my position. Which is why Centrica is being seriously considered for topping-up.

I can't do anything until the coming tax year, but then I want to sell sufficient non-ISA shares to enable me to take advantage of next year's ISA allowance.

I could just move shares, and I shall do some of that, but it makes sense to do a bit of rebalancing out of overweight holdings as well, which liberates some money for top-ups or new purchases. I don't really need any more HYP holdings (30 is enough) or sectors which is why Centrica comes into the frame. Some financials are a good alternative, but that would take me over my 20% super-sector limit. A balancing act. As usual.


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