Merchants Share Discussion Threads

[essentialinvestor] 05/4/2016 14:02

I'm hoping for 380's, may be wishful thinking,
the UKX would need to be hit hard again for that price imv.

[veryniceperson] 05/4/2016 12:22

You just might get your chance Ess. Still quoting 403 to buy.

[essentialinvestor] 05/4/2016 11:32

Hopefully lower levels available as looking to add.

[veryniceperson] 01/4/2016 17:02

Wow what a roller coaster of a day. Is Merchant always like this?

[veryniceperson] 01/4/2016 13:30

Very volatile today.

[veryniceperson] 01/4/2016 10:47

New to this company/trust so shall hang back and see how it goes but maybe tempted. Great Dividend.

[essentialinvestor] 01/4/2016 10:44

Added 2000 at 3.969 this AM and a few BIST.

Largely in cash currently so tbh hoping markets trend lower,
will add a few more MRCH if available lower down.

[veryniceperson] 01/4/2016 10:18

Brought into these yesterday. What a difference a day makes. Long term hold for me nice dividend and hopefully long term groth. Been a long time since I invested in a trust. I usually invest straght into blue chip.

[essentialinvestor] 31/3/2016 16:57

All good points.

Tempted to add a few LLOY, if they can pay over 4 pence a share next year
and over 5 the following, you are locking in a fat yield.
May be some weakness in the run up to June giving an opportunity.

Woodford appears cautious on LLOY but he has changed his mind multiple
times recently as per RR. CNA and RMG.

Would not be surprised to see MRCH increasing their Lloyds holding,
already in the top 10.

[rcturner2] 31/3/2016 16:50

The way I see it, you are able to buy into some top quality companies at a discount, get a solid dividend and they have the revenue reserve too.

Even if any of the big holdings do cut their dividend, surely the trust can simply sell those holdings and replace them with better paying shares.

If you look at the top 3 holdings in the trust, GSK, Shell and HSBC, they are all on low share prices at the moment.

[broadgreen] 31/3/2016 16:49

Dividend is only just covered (24p dividends vs 24.05p EPS), but given the marketing value of '34 years of growing dividends' I would expect the divi to be held or increased marginally over the next couple of years at least. The 10.6p-per-share revenue reserve gives some room for manoeuvre. For example if there were widespread FTSE dividend cuts and Merchants EPS fell by 10% in each of the next 2 years, the dividend could still be maintained.
Special dividend from GSK next month will be welcome.

[essentialinvestor] 31/3/2016 16:47

shalder, astute point on the debt, will pass that one on to my Dad as he has
asked me about MRCH, thanks.

[shalder] 31/3/2016 16:43

Unusually high discount as mentioned, plus a chunk of very expensive debt terminates in 2018 which if necessary could be refinanced at vastly lower rates. The forward divi may not be so vulnerable as some think.

[rcturner2] 31/3/2016 16:43

EI - the 6% is part of the effect of the discount to NAV, the actual yield on the assets is lower. This is part of the benefit of buying into an investment trusts. They are geared which also increases the yield and they write options which increases the income.

[essentialinvestor] 31/3/2016 16:30

I'm not sure 6% is sustainable, even allowing for the 30 plus year record,
however they may be due the benefit of the doubt on that.


pike, yes it's fair point - added a few this AM, may again if we get some weakness.

Kicking myself for not buying some MYI last month, that was a great price near the lows.

[rcturner2] 31/3/2016 16:20

Top 10 Holdings (%)
GlaxoSmithKline 7.3
Royal Dutch Shell "B" Shares 6.9
HSBC 5.8
UBM 5.3
BP 4.6
Lloyds Banking Group 3.8
BAE Systems 3.4
Inmarsat 3.0
Tate & Lyle 2.8
Centrica 2.5

[stupidboypike] 31/3/2016 16:05

Although they didn't cut their dividend in 2008!

[essentialinvestor] 31/3/2016 14:39

Yes looking through some of the main holdings that is also what strikes me.

The flip side is perhaps that you can currently buy MRCH at a fat discount to NAV
and if the worst comes to the worst and they need to cut the divi, would
have thought any reduction would be small unless we are facing a re-run
of 08.

[joe say] 31/3/2016 14:35

looks good/interesting but key holdings include dividend risky HSBC, BP, GSK etc

[essentialinvestor] 31/3/2016 11:57

lol - the yield is just over 6% at the current price.

[colonel a] 31/3/2016 08:56

Is it unreasonable to expect MRCH to name the two who beat them ?

[essentialinvestor] 31/3/2016 08:10

Their outlook on the macro appears a little optimistic to me.

[stupidboypike] 31/3/2016 08:07

Bought some more this morning, 6% fully covered, with a 34 year history of dividend growth and outperforming the index, what's not to like?

Best regards
SBP

[cwa1] 31/3/2016 07:39

Final Results:-