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Vodafone - buy?
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Common Sense 2
Posted: 20 January 2013 00:50:37(UTC)
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Hi there, is now a good time to buy Vodafone? I already own some shares in the company and would like to increase my modest holdings as they pay a good dividend. Also, i assume it's always a good sign when a company is starting to buy back their shares - can anyone confirm this? Is this so they can retain their profits? Thanks, V
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Alan Anderson
Posted: 20 January 2013 10:10:45(UTC)
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The price has been lower recently and you've missed the dividend so you've got a few months to wait and see if the price goes back down again. It's unlikely that the dividend will increase much or that there will be anything special coming from Verizon imo. Though there appears to be better news from India. They are useful stock all the same. You could rejuvenate your holdings. I would buy low with the intention of selling off an equivalent amount of your higher-priced purchases when the price spikes up. (Maybe when the rumour goes around again that Verizon are going to buy them out!)
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2 users thanked Alan Anderson for this post.
Common Sense 2 on 20/01/2013(UTC), espinasseur on 22/01/2013(UTC)
Common Sense 2
Posted: 20 January 2013 22:09:31(UTC)
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Hi Alan, thanks for your comment. I thought the price was low at the moment. Do you think it will get lower or what is a decent price to buy at?
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Alan Anderson
Posted: 20 January 2013 22:53:22(UTC)
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Nobody knows. I watch graphs a lot and try to find information. I last bought at under 159 but its been under 155. Will you be devastated if you wait for it to dip again but it soars to 170? As I said, you have some time to watch it before the next ex-div date approaches. Have you got alternatives on your watch list if the price runs away from you?
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Hilary hames
Posted: 21 January 2013 00:04:37(UTC)
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how do you sell you 'higher priced' holdings ? I thought that all your holdings unless you have paper certificates are just amalgamated?
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Alan Anderson
Posted: 21 January 2013 00:29:04(UTC)
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For Capital Gains Tax purposes(as I understand it, please confirm for your own peace of mind)you need to know the purchase price(and number of shares) and those that are held longest are treated as sold first, followed by the second oldest etc. In my case the older shares are the higher price. I assumed CS2's existing holdings were also higher priced.
On your share-dealing account multiple purchases may be averaged out or simply represented as purchase price versus current market value with the total number of shares at the side.
Clear as mud?
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Andrew McDonald
Posted: 21 January 2013 06:17:31(UTC)
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Alan Anderson;17632 wrote:
For Capital Gains Tax purposes(as I understand it, please confirm for your own peace of mind)you need to know the purchase price(and number of shares) and those that are held longest are treated as sold first, followed by the second oldest etc.


Sorry Alan to correct you, The treatment of Capital gains was changed a few years ago. The age of the stock (to be able to carry out matching trades) is now irrelevant as capital gains are calculated on pool value (i.e. average price).

This minor point does not detract from your good advice to buy low and sell high (thus reducing your average price)

From a personal point i would recommend anyone making more than a few trades per year to keep an excel record to be able to quickly calculate average price etc since the average price relates to all your holdings of that share across all brokers - dont ask my situation is complicated!
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5 users thanked Andrew McDonald for this post.
Guest on 21/01/2013(UTC), Alan Anderson on 21/01/2013(UTC), colin wilson on 21/01/2013(UTC), Guest on 22/01/2013(UTC), Clive B on 11/03/2013(UTC)
Alan Anderson
Posted: 21 January 2013 08:10:40(UTC)
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No, thanks Andrew. I wondered why that book on share-dealing was discounted so much! Though I do keep an Excel record. And apologies to Hilary - but I did warn you!
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Dividend Income investor.com
Posted: 21 January 2013 17:18:39(UTC)
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Hi Common Sense, et al

I have extensively reported on Vodafone, most recently here at: http://seekingalpha.com/...idend-by-almost-a-third in conjunction with Vodafone's European competitor's Deutsche Telekom cut in dividends.

Notwithstanding that we own shares in Vodafone in our Dividend Income Portfolio and the apparent benefits of a relatively high (prospective) dividend yield, Vodafone' shares are currently not trading at historically undervalued share price levels as per our valuation methodology.
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J Thomas on 21/01/2013(UTC), Alan Anderson on 21/01/2013(UTC)
Hilary hames
Posted: 21 January 2013 18:22:29(UTC)
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so for capital gains on a share you take an average of all the prices that you have bought at to arrive at a starting price for the share you have sold? then take this price for one share and take it from the price for one share that you have just sold, then multiply up for the number of shares you have sold to arrive at a capital gains?
Then, if you sell more of that share later you just start again taking an average of whatever holdings you now have left and do a fresh calculation based on that

Is that right?
I havent had to bother in the three years I have held shares....but its good to know the process
Thanks
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Dennis .
Posted: 21 January 2013 18:58:03(UTC)
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I have always been wary of telecoms companies apart from BT. My reasoning is as follows. Fundamentally telcos are offering a commodity delivery channel with no added value, they are in a slow race to the bottom in terms of pricing as revenues from voice traffic go down and it's easy for a subscriber to switch to a cheaper tariff or operator. Things like VOIP (voice over IP) mean that you can talk for free over the internet and new apps are coming out to make this easier. Text messaging is on the decrease as people use instant messaging via internet. The people who make the money are the content providers who use their channels. Just think, do you know the name of the company that delivers your terrestrial TV (it used to be BBC but they hived it off years ago) or the name of the company that owns the Sky satellites ? There are numerous operators including BT looking at setting up nationwide wifi to bypass mobile and where does that leave mobile operators?

BT is different by nature of it's "last mile" monopoly infrastructure, it's voice revenues are also falling but it is now becoming more like a cable company and it's doing content deals and pushing TV services.

Whatever the hype about 4G the mobile operators will have great difficulty in supplying mass broadband (lots of places still haven't got 3G). Currently outfits like Vodafone deliver good divdends but for how long?
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1 user thanked Dennis . for this post.
Guest on 23/01/2013(UTC)
HKMike
Posted: 21 January 2013 19:20:09(UTC)
#12

Joined: 09/04/2011(UTC)
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Buy China mobile. relatively cheap, good dividend & still growing, albeit more slowly than before. And move to Hong Kong - none of that ridiculous capital gains tax!
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Codger
Posted: 21 January 2013 19:35:22(UTC)
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I can't think of many companies whose share prices have risen after they started buying back their own shares. It usually means they have gone ex-growth.
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rik
Posted: 21 January 2013 22:53:23(UTC)
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Wether its a good time to buy or not depends on how much spare cash you have. Why would you want cash in the bank instead of in VOD?
If what you want to do is 'trade' there are more volatile companies lower down the market cap list. If you want 'income' long term there a few other options (RDSB, GSK etc).
VOD is pretty much a utility share now, and comes with the dividends of that ilk, and the 'staid' nature of its share price.

Rik
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Alan Anderson on 22/01/2013(UTC)
MOGO
Posted: 22 January 2013 16:45:13(UTC)
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I am always suspicious of the motives of a company buying it's own shares back with shareholders money, because that's what it is. The main reason for buying back shares is to hold the share price up beyond that that is justified by it's more recent performance.

Mojo
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Barrie Archer
Posted: 27 January 2013 16:27:27(UTC)
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Joined: 08/10/2012(UTC)
Posts: 1
Common Sense 2;17620 wrote:
Hi there, is now a good time to buy Vodafone? I already own some shares in the company and would like to increase my modest holdings as they pay a good dividend. Also, i assume it's always a good sign when a company is starting to buy back their shares - can anyone confirm this? Is this so they can retain their profits? Thanks, V
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David Shelton 0
Posted: 11 March 2013 19:35:37(UTC)
#17

Joined: 11/02/2013(UTC)
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I bought at £1.70 recently. As of close today the price is up to £1.82. Anyone have any insights on the most difficult part of share dealing (for me) about knowing when to take a profit?
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Alan Selwood
Posted: 12 March 2013 00:21:09(UTC)
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Is Vodaphone cheap now?
Not compared with just a few short years ago when the price dipped to around £1 per share. Since then it has generally wavered up and down in the 165p to 180p range. The Verizon tie-up or future separation looks like the only event of any significance.
I agree that telecom companies are basically cash cow utilities these days, and that their market share and revenues look to be on a downward trend because of competition, internet calling (VOIP) and probably saturation compared with a few years ago.
BT still needs to sort out the rest of its pension fund deficit.
Singapore Telecom, anyone? Or Verizon?
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Alan Selwood
Posted: 12 March 2013 00:30:54(UTC)
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Capital gains tax calculations:

Yes, generally speaking you sell part of a pool of shares of the same company and type, BUT there are special rules in certain cases, where you do part-sales or do buy-backs within 30 days:
See:
[url=http://www.hmrc.gov.uk/cgt/shares/co-reorg.htm]
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