Chesnara Share Discussion Threads

[tudes100] 02/6/2021 00:32

Which director buys are you referencing ? I can't see any since Sept 2020 ?

[bluemango] 01/6/2021 08:45

Done the deed.

Switched from the newly recovered but low yielding TMPL IT, to this. Couldn't resist the juicy more than doubling in income from the new holding compared to old.

Apart from the other factors, what swayed it in the end was that smattering of relatively recent director buys; two of them quite significant. Plus the chart looks interesting; I think the range has been narrowing; most evident looking at the 3 year chart. Given the formation as a whole, starting Spring 2020, this can sometimes end in breakout; hopefully northwards.

[bluemango] 31/5/2021 09:05

Thanks jonwig.

The Peel Hunt 290p fair value is from 2 years ago - maybe they'd adjust it upwards by now.

(Edit: for those wondering where the £637m 424p/sh 'economic value' comes from, it's in the 12th May directorate change RNS)

[jonwig] 31/5/2021 07:58

It's the same problem described by PHNX - existing policies go into run-off, and new investments are needed to maintain the momentum. PHNX has done this in spades. CSN hasn't been able to (smaller size) or willing to (less willing to raise equity). Seems to make one smallish acquisition each year.

The company says its "economic value" is £637m (424p/sh) which is hard to square with PH's fair value of 290p, even though they probably measure quite different things.

[bluemango] 30/5/2021 18:48

Anyone got any comment on this Peel Hunt note from a couple of years ago? Admittedly they've made acquisitions since, but it's slightly concerning to read the expectation of 'flat dividends after 2023', which is somewhat at variance from company statements talking about continuing dividend growth. Of course given the current high yield, so long as the capital held its value, a flat dividend at or above the current level after 2023 (or at least keeping up with RPI) would not necessarily be a bad thing ...

One thing I've been impressed with (other than the excellent yield), is the three different NED buys over the last year or so; quite hefty amounts.

[chairman2] 30/5/2021 18:33

sector rotation out of financials and into commodity stocks

[thamestrader] 30/5/2021 15:54

My understanding is that SLA, the company, is not selling CSN, but some of its funds (under SL Investments Limited and Aberdeen Asset) are, presumably to match outflows or (worryingly) because they see better opportunities elsewhere. I don't imagine the proceeds will be available to help fund their share buybacks.

Only guessing, though.

[fenners66] 30/5/2021 15:24

SLA probably selling CSN to get more funds , with which to buy their own shares with , cos that is going so.... well.......

[bluemango] 30/5/2021 13:28

Thanks. I must say the lack of dividend cover is a bit of a dampener, compared to e.g. PHNX's 1.93.

Is CSN still seen as a potential takeover target for PHNX?

Regarding the reducing holding by SLA, arguably that creates a temporary buying opportunity, but I'd be curious about any known strategic reason for their action.

[thamestrader] 30/5/2021 12:25

I've had one tranche of CSN continuously since July '19, which has lost 9.6% (even after dividends), but I have also traded several other tranches all of which have been profitable, some of which I still have. Thanks purely to the divi I have a nice overall profit, without the divi I would show a loss on most of them.

I note the latest divi is covered only 0.6x, but this hasn't always been the case, and hopefully it is temporary. The fact they increased the divi, despite its not being fully covered, suggests to me they are confident it is indeed temporary. Here's what the last report said in the subject.....

SHAREHOLDER DIVIDEND INCREASE

Prudent financial management and solid results mean we have been able to maintain our dividend model and increase the dividend payment in 2020 by 3%. Importantly, this has been done without compromising the financial stability of group. The post dividend group solvency ratio has increased slightly to 156% (31 December 2019: 155%) and the closing Chesnara cash balance remains healthy at £59.9m (31 December 2019: £75.5m) having repaid debt of £15.4m in the year.

and later.....

3% INCREASE IN FINAL DIVIDEND

The results support the continued growth of the final dividend to 14.29p per share (2019 final: 13.87p per share) ), resulting in a 3% increase in the total full year dividend to 21.94p per share (2019 full year: 21.30p per share). This constitutes the 16th consecutive annual dividend increase for shareholders.

[gateside] 30/5/2021 11:10

Likewise... Recently bought PHNX and that has led me to CSNIf anyone has followed CSN for a while, I'd be interested to read your thoughts on how safe the dividend is. Seems pretty safe to me, but I'm no expert on the company as yet.

[bluemango] 30/5/2021 09:21

Morning guys.

Could someone tell me if there's any known rationale for SLA's gradual reducing their holding which seems to have kicked off after October? Presumably this is what's keeping the price down, given the high yield?

And secondly, any honest opinions please on how sustainable the dividend and capital preservation are both seen as, looking ahead to say a ten year horizon? Many thanks. Already hold PHNX which is what brought me here.

[elsa7878] 28/5/2021 17:39

Slow bleed as Standard Life sells down. Never seem to be any large blocks changing hands so they must be dribbling it out. 4.2 million shares in nearly 6 months and depending on their intentions possibly another 20 million plus to go...

[thamestrader] 27/5/2021 08:51

I'm with HL, and it was paid on the 24th

[mrphil] 27/5/2021 08:15

Just checked my HL account and nothing in there yet.

[dosser50] 26/5/2021 11:07

Mines been paid

[wllmherk] 26/5/2021 10:42

still waiting on my dividend being paid into my Halifax account, they have been a bit slow lately with dividend payments, DLG dividend was 3 days late. Not a big deal as they land in the account eventually.

wllm :)

[chairman2] 13/5/2021 12:32

pretty impressive plan for the
changeover.

I dont underestimate the key role
that John Deane has played keeping
this share financially secure.

[makinbuks] 12/5/2021 10:17

Can't imagine it will change much

[jonwig] 12/5/2021 07:15

John DEane to retire:

[williamcooper104] 16/4/2021 11:29

LGEN has bounced back - and PHNX too (though to a lesser extent)

[makinbuks] 16/4/2021 10:56

jonwig, a fair point, and of course the embedded value of policies varies with the yield of those gilts (broadly) too so perhaps focusing on a single year is not something one should do in a long term business like this.

WC, don't think you're missing anything. At the moment this type of stock is not preferred to the cyclical value stocks or the pandemic recovery opportunities. If people see a chance of 25% gains they're not goin to buy a "steady eddie" like this

[williamcooper104] 15/4/2021 17:26

No question this looks cheap - given the run up in share prices of others in the sector The yield looks relatively safe Wondering what I'm missing here

[jonwig] 15/4/2021 17:05

The gilts owned by CSN (and others) yield the same income as when they were bought, up to maturity. Of course, maturing gilts have to be reinvested at a lower yield.

[makinbuks] 15/4/2021 16:32

Yes, the beauty of an insurance company is that you make your capital work twice! On one hand you write business on which you hopefully make a profit through premiums exceeding claims plus admin costs. In so doing you are required to hold a volume of gilts relative to the size of your book and you get to keep the coupon on those gilts. There have been times in my life when raking in investment income meant that turning a profit on insurance was almost overlooked. With negative real rates, until very recently, gilts yielded virtually nothing.