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BT
Inderpal Singh Khalsa
Posted: 14 April 2018 07:21:51(UTC)
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After a long while there have been some upward movements for BT

Share Price Changes - iwebshare dealing
Period Price Change Percent Change
1 week 234.55p +6.95p +2.96%
1 month 225.50p +16.00p +7.10%
3 months 274.90p -33.40p -12.15%
6 months 274.85p -33.35p -12.13%
1 year 313.10p -71.60p -22.87%
Additional BT Group Price Data

BT Group plc: Berenberg reiterates buy with a target price of 310p.

Is the dead Cat bouncing back?
Is there any hope of recovering the losses?
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Mr Helpful on 14/04/2018(UTC)
MartynC
Posted: 14 April 2018 07:49:57(UTC)
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A couple of my friends recently retired from BT at the age of 60 on very good Final Salary pensions. - I believe the legacy DB scheme will be a burden on the company for many years to come but I understand it was closed to new entrants (like many other DB pension schemes) in 2001.
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Mr Helpful on 14/04/2018(UTC)
Mr Helpful
Posted: 14 April 2018 07:59:19(UTC)
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Having recently added BT.A to the 'defensive side' Infrastructure holdings; rather than the more logical perhaps Risk/Growth side, am content to lie back and enjoy the dividends.
Think it a little early to conclude decisively that a bottom has formed, A few more fluctuations needed yet.
Then there is the matter of the impending results. What may they reveal?
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Inderpal Singh Khalsa on 14/04/2018(UTC)
Tyrion Lannister
Posted: 16 April 2018 00:05:01(UTC)
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Like lots of people, I bought BT shares primarily for the income and on paper I’ve lost significant money wrt share price.

However, in the medium term, I really don’t care about the share price. I do though care about dividend cover. At only 1.25, is this cause for concern?
King Lodos
Posted: 16 April 2018 00:38:36(UTC)
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I don't know BT's business in great detail ..

But what I do know is it's never been a good idea to buy a stock for the dividend .. If you want income: buy the bond, all day.

A company that destroys value to pay a dividend is just an expensive annuity, until it goes bankrupt .. I say this because I have to remind myself: When you buy a stock, you have to know enough about the business to know what you'd do if it fell 10, 20, 60% .. Doing nothing means we maximise our mistakes, and fail to capitalise on the market's – it means we didn't know enough about the business, and when you buy a stock: it's the business you're buying; not the income



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Peter59 on 01/05/2018(UTC)
Mr Helpful
Posted: 16 April 2018 07:57:21(UTC)
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Tyrion Lannister;60685 wrote:
However, in the medium term, I really don’t care about the share price. I do though care about dividend cover. At only 1.25, is this cause for concern?

The next set of results should illuminate somewhat?
In 2017 results it will be noted, there was a huge discrepancy between basic earnings and adjusted earnings (19.20p v 28.90p).
The half year results echoed.

P.S.Think it unlikely dividend growth will be in the double digits of old.
Flat, or in line with inflation, might be a more rational decision.
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Sara G on 16/04/2018(UTC)
Mr Helpful
Posted: 30 April 2018 11:04:26(UTC)
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Chartists may have observed that the trail of descending highs has been broken.
Now, more importantly; all hinges on the results.
Inderpal Singh Khalsa
Posted: 30 April 2018 16:53:26(UTC)
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Period Price Change Percent Change- iwebshare
1 week 243.80p +5.65p +2.32%
1 month 227.50p +21.95p +9.65%

Definitely trend has been upwards for a while.
Let's hope it's not a false alarm. Results are due on 10th May.
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Mr Helpful on 30/04/2018(UTC)
Mr Helpful
Posted: 26 May 2018 13:10:33(UTC)
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Apparently (Mr H probably the last to find out) BT have declined offer(s) for Openreach
rumoured @ circa £25bn from Private Equity and Infrastructure investors.
With BT present market cap circa £21bn, this story could run.
How Ofcom and telecom competitors might opine, will be intriguing to watch.
Can anyone figure out the financial implications for investors?
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Jeff Liddiard on 26/05/2018(UTC)
Jeff Liddiard
Posted: 26 May 2018 15:42:52(UTC)
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Mr Helpful;62948 wrote:
Apparently (Mr H probably the last to find out) BT have declined offer(s) for Openreach
rumoured @ circa £25bn from Private Equity and Infrastructure investors.
With BT present market cap circa £21bn, this story could run.
How Ofcom and telecom competitors might opine, will be intriguing to watch.
Can anyone figure out the financial implications for investors?


I'd be interested too. There is some talk on the London South East forum but it appears unclear if Openreach own the infrastructure or if they possibly licence it from BT. I'd like clarified what both BT and Openreach would own/control if Openreach were to be sold. And therefore what would the value of each entity be worth. Anybody know?
Keith Cobby
Posted: 26 May 2018 15:43:21(UTC)
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Flotation price 1984 £1.30. Price now £2.10. Pleased to have sold years ago.
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Mostly Retired on 26/05/2018(UTC)
Mostly Retired
Posted: 26 May 2018 16:26:48(UTC)
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Keith Cobby makes an interesting observation as always.

I wonder though, if one had bought in 1984 and left dividends reinvested and sold now - would the "miracle of compounding "have beaten a good risk free investment ?

Always an interesting conundrum - the bare share price implies a poor return (IRR of 1.4% 'ish), but reinvested dividends I think may make a more sustainable argument.

I leave myself open to serious challenge for the sake of the wider debate on dividend reinvestment versus bare capital gain !

Regrettably, I can not press good data to support either case - but any input welcome!

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Tim D on 29/05/2018(UTC)
markus
Posted: 26 May 2018 18:12:48(UTC)
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Mostly Retired;62959 wrote:
Keith Cobby makes an interesting observation as always.

I wonder though, if one had bought in 1984 and left dividends reinvested and sold now - would the "miracle of compounding "have beaten a good risk free investment ?

Always an interesting conundrum - the bare share price implies a poor return (IRR of 1.4% 'ish), but reinvested dividends I think may make a more sustainable argument.

I leave myself open to serious challenge for the sake of the wider debate on dividend reinvestment versus bare capital gain !

Regrettably, I can not press good data to support either case - but any input welcome!



Dividends are all on the BT plc website

Excluding the proposed 10.55p in Aug this yr you've had £4.3925 back in dividends since floation

Plus you've had 82.75p from the O2 de-merger
Sara G
Posted: 28 May 2018 15:59:43(UTC)
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Jeff Liddiard;62956 wrote:
Mr Helpful;62948 wrote:
Apparently (Mr H probably the last to find out) BT have declined offer(s) for Openreach
rumoured @ circa £25bn from Private Equity and Infrastructure investors.
With BT present market cap circa £21bn, this story could run.
How Ofcom and telecom competitors might opine, will be intriguing to watch.
Can anyone figure out the financial implications for investors?


I'd be interested too. There is some talk on the London South East forum but it appears unclear if Openreach own the infrastructure or if they possibly licence it from BT. I'd like clarified what both BT and Openreach would own/control if Openreach were to be sold. And therefore what would the value of each entity be worth. Anybody know?


BT retain ownership of the network, i.e. it is not part of the new Openreach entity, but the size of the rumoured offer suggests that the prospective buyers are looking to acquire the infrastructure - and the press reporting seems to make the assumption that the grid is part of the package.

If they were to sell it without the grid, they would still be on the hook for future investment, but would have license income from a profitable business. If they get rid of it they get a cash pile, but are left with businesses that are facing increasing competition, so possibly might spend it on acquisitions, which could be good or bad. OTOH Openreach itself is facing competition from new entrants, and Vodafone teaming up with one of them, so it may be that it would fare better under new management.

Either way, the staff are now part of Openreach, so operating costs would reduce, and presumably the pension liabilities would go with them too?...

I've just spent the afternoon ploughing through the annual report (sad, I know!), prompted by the scare stories around the Altman score (just over 1 and well in the danger zone), but I personally can't see that they are on the verge of imminent bankruptcy (although I may be missing something), but the business outlook is certainly getting tougher, so maybe they are just biding their time to see if the offer is raised.



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Jeff Liddiard on 28/05/2018(UTC), Mr Helpful on 28/05/2018(UTC), john_r on 29/05/2018(UTC), Tim D on 29/05/2018(UTC)
Keith Cobby
Posted: 28 May 2018 17:26:52(UTC)
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The problem with BT is it (and us) want it to be a tech growth stock but it is unfortunately a low growth, heavily regulated utility. I suppose it is ok if you are an elderly investor who just wants dividends to live on. Those of us who want growth in our capital have to look elsewhere.
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Jeff Liddiard on 28/05/2018(UTC), Tim D on 29/05/2018(UTC)
S_M
Posted: 28 May 2018 17:37:02(UTC)
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Keith Cobby;62957 wrote:
Flotation price 1984 £1.30. Price now £2.10. Pleased to have sold years ago.


The price peaked at £15 in 1999. Then the telco/dotcom bubble burst, and BT was saddled with billions in debt from its pension scheme liabilities.

You would think that a company that owns the rights to the Champions League, owns one of the biggest mobile carriers in the UK and has exclusivity over the infrastructure that delivers our telco services would do much better.

Although hindsight is a great thing, you can see the management of Sky have always had their fingers on the pulse, and the share price has responded over the years.

This is why especially with the advent of pension freedoms, opting for investments exclusively that offer strong income streams is wrong. There HAS to be an element of a portfolio that focuses on growth. Of course, one's tolerance for risk is important, but BT in the same way as a dud growth stock, has bombed out over the last 20 years, while the likes of Ebay, Amazon, Apple, Microsoft etc etc have flourished.

The management of BT (and M&S) are living in the dark ages.
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Jeff Liddiard on 28/05/2018(UTC), Keith Cobby on 28/05/2018(UTC), J Thomas on 28/05/2018(UTC), Fell Walker on 29/05/2018(UTC), john_r on 29/05/2018(UTC)
john_r
Posted: 29 May 2018 00:48:24(UTC)
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S_M;63045 wrote:


........ but BT in the same way as a dud growth stock, has bombed out over the last 20 years, while the likes of Ebay, Amazon, Apple, Microsoft etc etc have flourished.
The management of BT (and M&S) are living in the dark ages.


Fortunately it is not all doom and gloom in the UK. Further up the road Next Plc is showing M&S that recovery is possible if you recognise the problems and do all the right things. Next bottomed out at around £39 per share 10 months ago suffering from the same foot-fall malaise as M&S but the Company is now well into recovery with the share price above £58. Whilst not having the revenue of M&S, Next does seem to make consistently better profits - usually shared out as special dividends or buy-backs.
I could take some profits now but on balance I'll keep faith with the successful Lord Wolfson a little while longer.
As for BT, a juicy dividend just isn't enought to tempt me in for the long term.
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Keith Cobby on 29/05/2018(UTC)
Keith Cobby
Posted: 29 May 2018 07:29:37(UTC)
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Interesting you should mention NEXT as this has always been my investing regret. A long time ago it bottomed out at 11p and I, and many others, thought it was the end!
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Sara G on 29/05/2018(UTC), john_r on 29/05/2018(UTC)
Sara G
Posted: 29 May 2018 07:43:59(UTC)
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Beyond the dividend I see it as a potential recovery play (rather than strictly value) based on low p/b and added recently at 202p. Any activist investor interest and / or if the Openreach rumours gather pace may also prompt a spike in the price. But I'm prepared for it to get worse before it gets better.
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Jeff Liddiard on 29/05/2018(UTC)
Alan Selwood
Posted: 29 May 2018 08:08:49(UTC)
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I have issues with BT, M&S, Next and Vodaphone.

BT had a dominant market position, but its pension deficit and its unwillingness to provide modern infrastructure except when forced shows it to be lacking in abilty to innovate its way into retaining a competitive moat.

M & S gave up its best competitive moat when it opted to sell cheap, poorer quality clothing and to try to move into parts of the market where price was considered more important than quality. It also lost its way in terms of selling what its main customer base wanted. Style issues remain.

Next has better skills at retail marketing, but the quality of the clothing leaves much to be desired, so I don't see it as a long-term winner.

Vodaphone, like BT, has issues, mainly in its case that its market has become more of a commodity, so price pressures apply; but also, it chose to reduce customer service costs by using overseas call centres, and seems to lack the will to provide a level of service that makes it competitive on quality. Rather like the big electricity suppliers.

As they all have issues that in my view eat away at their long-term ability to doninate their sector, I prefer to look elsewhere.
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Jeff Liddiard on 29/05/2018(UTC), Aminatidi on 29/05/2018(UTC), Tim D on 29/05/2018(UTC), john_r on 29/05/2018(UTC), Keith Cobby on 29/05/2018(UTC), Jim Thompson on 11/06/2018(UTC)
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