Chesnara Share Discussion Threads

[linton5] 24/12/2021 09:52

Yip have a good one CWA1 nice to have a wise old man board 🦉😘

[cwa1] 24/12/2021 08:37

276p on offer(briefly anyway), so I decided to top up a little. Have a brilliant Christmas all({I'm braving the shops momentarily!)

[linton5] 23/12/2021 10:35

Very boring share but reliable dividend you can sleep at night leaving your investment,due a rise noticed peeps nibbling away quietly

[dosser50] 22/12/2021 12:58

Bought a few more for Christmas.

[linton5] 08/12/2021 13:16

Well done good pickings for the very observant sir

[cwa1] 08/12/2021 13:10

Morning all

Picked up a few this morning at just under 280p.

Good fortune to one and all :-)

[williamcooper104] 02/12/2021 16:35

True; I think I mean a perceived value play

[al101uk] 02/12/2021 16:15

Good commentary on Value Investing:



And the lost 10 years :-)



And the final peice:

[al101uk] 02/12/2021 15:41

Williamcooper,

Value traps certainly have one way beta, the problem is telling the difference and how you classify something as a value type investment.

A value play being overvalued is a strange description of a value play ;-)

[jonwig] 02/12/2021 15:28

Fortuitously, Hardman initiates coverage:

[williamcooper104] 01/12/2021 23:09

The problem with value is that it's often one way beta - in that it doesn't raise so much in a bull market but it takes the full fall or more in a bear market Value with a yield often gets overvalued too - eg GSK

[williamcooper104] 01/12/2021 23:07

I bailed on CSN for LGEN/PHNX as could see better growth potential in those two - though long thought CSN the more likely take private target - but clearly that's not happens

[williamcooper104] 01/12/2021 23:05

Yep - it's a higher total return - not an 11 income return

[luderitz] 01/12/2021 22:40

You can't have it all all of the time.

[tomleafs] 01/12/2021 20:11

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

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

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

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

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

? 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

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

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

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

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