Chesnara Share Discussion Threads

[tomleafs] 01/12/2021 20:11:11

Riverman you are correct, I should have been a bit clearer in my original post. I echo Lord Gnome's response, value has suffered a lost decade whilst growth stocks have raced ahead of fundamentals. Egg, in answer to your question regarding reasons to get back in I can offer a few (1) persistently higher inflation could prompt central banks to raise interest rates which would be good for companies like Chesnara - see chart on page 43 of 2020 annual report for figures (2) rising inflation has generally been easier on value rather than growth stocks, this is because growth stocks have payoffs well into the future which need to be discounted at a higher rate in order to take into account increased inflation. Companies like Chesnara make their payoffs in the short-term (8% per year @ current SP) and therefore don't need to be discounted as heavily, since you can spend the cash each year before it gets devalued by inflation (3) the new CEO might have some ideas to unlock value or even attract a bid, who knows (4) you are being paid 8% to wait whilst being pretty confident of 2-3% increases each year, a couple of years ago you'd only be able to get a yield of 5% or so (5) if it all goes pop thanks to J Pow and his merry friends then the div yield and book value on offer here should cushion the fall somewhat. Rivian or Tesla... not so much ;-) ATB

[al101uk] 01/12/2021 18:59:11

Yep, Lord Gnome has nailed it. Falling interest rates from a low base has pushed everyone in to growth stocks as that's where the returns are.

Meanwhile Chesnaras management wear "Boring" as a badge of honour (listen to an interview or two... not a boring interview, they say they aim to be a boring income stock).

I like some boredom in my portfolio, so these suit me and they've been range bound for what seems like an eternity so easy to trade a little for some capital gains... buy below £2.80, sell in to the pre-dividend rise which is normally something over £3.

Their acquisitions are generally good and I don't think the share price reflects the quality of the business... I kind of hope it stays that way because this is a core holding for me and I'd hate to have such an easy to hold income stock ruined ;-)

[eggbaconandbubble] 01/12/2021 17:41:13

Please don't get me wrong here.

I'm not saying anything on hindsight. I just want to know anyone's explanation why the share price has dropped over the last few years. As such I might get an idea if it is now time for a turnaround in fortunes and with a handsome divi, maybe the time to get in.

I could say 'get back in' because I was in CSN some years ago but sold - why? I can't remember - but it was most probably to put the funds into another share that was falling faster!!! LOL!

[riverman77] 01/12/2021 17:29:32

I think he means if the dividend increases by 3% then the share price will also increase by 3% in order to keep the yield at 8% - so the total shareholder return should be 11% in that scenario.

[jonwig] 01/12/2021 17:00:35

eggy - hindsight is a wonderful thing. But OK, what does your crystal ball tell you will happen over the next 3-5 years, and is it totally reliable?

PS. You're right that 8% + 3% growth isn't 11%!

[eggbaconandbubble] 01/12/2021 16:35:27

? I could be wrong here but on my calculator 8% divi plus 3% divi growth adds up to 8.24%!

On the share price front - over the last 3-5 years there's been an approx. 30% drop in share price So one might have just put the money in the bank and spent 8% of it each year.

BWTBHDIK?

[tomleafs] 01/12/2021 13:01:51

You answered your own question, cheap share price and therefore high dividend yield. A respectable history of 3% div growth as well. When you add everything up you get div yield of 8% + 3% growth = 11% return going forward (if PE stays constant). Not bad considering other areas of the market are at nosebleed valuations.

[eggbaconandbubble] 01/12/2021 12:54:13

Apart from a good dividend, why would I invest in CSN, bearing in mind the share price over the last few years has been poor?

[thamestrader] 01/12/2021 11:50:03

Some funny bid/offer price action today.
Anyway, took advantage and swapped some of my oversized Aviva holding into CSN.

[makinbuks] 25/11/2021 11:54:02

£2m annual cash seems a good deal at 12.5% on EV and even better for the invested value

[jonwig] 25/11/2021 07:15:36

Acquisition, Netherlands:



Looks good value for £13m.

[fenners66] 05/11/2021 07:34:10

Can I borrow that UT fairy sometimes , please ?

[cassini] 05/11/2021 01:58:39

Well well, the UT fairy came along late at night sometime and expunged the big UT drop.

How weird is that?

[scrwal] 04/11/2021 18:57:32

I had heard of UTs but this was a big drop.
Seen it happen a lot with Aviva but only 4p max.

[jonwig] 04/11/2021 17:51:35

The uncrossing (UT) at 178p.

That's the closing auction (and determines the official closing price). It's not a reliable guide to tomorrow's opening and may well self-correct, but the spread could be too wide to trade first thing.

[scrwal] 04/11/2021 17:32:12

Anyone know what caused the massive drop at the close?

[thamestrader] 27/10/2021 13:34:40

back in at 282.5p, slightly higher than I'd like, but hey.

[1knocker] 24/10/2021 15:54:10

That's my buy zone too edmundshaw, and I look to sell over about 305. I tend to sell enough to recover my outlay on the previous purchase, retaining a few extra shares. Over the years, the holding has grown nicely, with a modest reduction in capital invested. I see no reason to hurry at present as the next ex dividend is months away and the market is choppy, so I have high hopes of an other purchase at about 270.

[petewy] 24/10/2021 13:49:09

thanks Tote

[igoe104] 22/10/2021 09:52:58

Hi gents, I don't know about you but My dividend today will automatically be revested today if received hopefully today.

[edmundshaw] 07/10/2021 16:39:16

My buy zone is historically more like 270p, but that is looking a bit harder to get to these days. Sometimes the "trading range" just moves...

[fenners66] 07/10/2021 13:19:08

That volume chart has spiked up today....

[smilie] 07/10/2021 12:41:05

Try setting a limit buy order, mine triggered yesterday in a brief drop and I got them for 279.5.My limit order was set at 280