Highway Insurance Share Discussion Threads

[mozz41] 26/9/2005 12:12

Yes here we go again, great stuff, good luck to all

[jwe] 26/9/2005 12:00

A lot of interest in the last 20 minutes anybody have any ideas.It looks to me that the seller has now been cleared out, if that is so then we should move up to a more reasonable 70-75p.

[rivaldo] 20/9/2005 13:14

Nope - they've sold 1.5m, so are down from 13.29% previously (27.02m shares. Seems like good news if now two large holders can top-slice into a market without the share price dropping except for an ex-div markdown - must be plenty of demand for the shares.

[jwe] 20/9/2005 13:04

Is North Atlantic a new holder?

[randv] 20/9/2005 12:44

Hello Kenmitch....Hope your MW is all sorted now.

Roy

[factsonly] 20/9/2005 10:22

It'll get there, it justs gives smaller investors a chance to jump on before some large funds/banks buy large wedges driving the price up.

[jwe] 20/9/2005 09:16

HWY is xd.
Kenmitch- whilst i take your point regarding companies yielding 9% plus being usually in trouble and the dividend not being sustainable the view i take the here is that as the company has only just announced its intentions to increase the divi by 89% (they did not have to do this)and therefore must be pretty sure of their ground.Therefore i agree with your conclusion that these should rerate to circa 70p.

[factsonly] 20/9/2005 08:35

Maybe I'm missing the point, but I thought HWY had gone XD? thus explaining the recent drop in sp, it's not showing up on advfn as xd though. The only reason I guess it isn't showing xd anymore is because the record date has passed, although I've seen other companies with "xd" even thought their record dates have passed.

[rabain] 19/9/2005 15:54

Statement from Chaucer re Katrina?

[kenmitch] 19/9/2005 13:57

You're right. Sorry. Misread the vital sentence on the final dividend in the results statement,and carelessly took it to mean a final of 5p whereas the final should be 3.4p. I've now corrected the figures in the original post.

Have just seen the share price drop again - now down 1.25p. Odd. Explanations anyone?

[049balt] 19/9/2005 13:45

kenmitch, I believe the total payout is 5p and not 6.6p.

[kenmitch] 19/9/2005 13:29

alansmith23.

pvb has answered your second question.

You probably followed his reply to 1 too, but if not it is simple.

The HWY shares you bought for 33p will, if the Company keeps it's word, pay out a dividend of 1.6p interim - already gone ex. divi - and a final dividend of 3.4p. That would give you a total dividend of 5p and a dividend yield of around 15% on your purchase price.

Obviously the shares you've just purchased at the higher price (58p) also get the 5p total dividend. So even this later purchase is going to pay out around 9%.

Nearly all dividends work this way so once you've grasped it for HWY you'll have no problems with other shares.

I LOOKED at HWY around 35p - but ended up buying after the interims for over 50p. Still a bit worried that it all looks too good to be true, and there is nothing of course to stop HWY from reducing that final - or even cancelling it altogether if trading deteriorates. Notor insurance is very competitive and there is no guarantee that they will continue their successes with investments.

I'm no expert on HWY - but wonder why there is that big seller, and would be grateful for any further reassurances that the dividend promised is likely to become a reality. And will they really be able to sustain such an amazing dividend after that?

A clue will be in the share price performance over the next few weeks. If investors become convinced that the promised total of 5p is for real, then the share price should rise substantially to reflect that, because a very high dividend yield usually means one of two things. Either the shares are an absolute bargain - or the dividend is going to be cut. There are few - if any - companies paying a current sustainable yield of 9%%. It is reasonable to expect the share price to rise at least until it brings down the yield to around 7%. That would give a share price around 70p - the Numis target.

EDIT. This post originally contained a load of incorrect figures as I had wrongly taken the final dividend to be 5p whereas the statement makes clear it is the TOTAL dividend that should be 5p. Thought it better to correct the figures than for anyone seeing them - say just before the close - and perhaps rushing to buy on false info. Apologies for that mistake.

[rivaldo] 19/9/2005 10:50

Good news...


"In a note on the insurance sector the broker has upgraded its rating for Highway to buy from hold, raising target price to 70p from 50p"

[pvb] 18/9/2005 19:40

When you own shares you just get the dividends that are announced for those shares. When (record and ex dividend date aside) and at what price you purchased them is irrelevent.

Brokers usually do amalgamate the same shares under one holding rather than showing them by deals. If you bought at different prices then the dividend yields of each deal will be different. The yield of the aggregate holding will then just be the weighted average from the purchases. In simple terms the aggregate yield will just be the total dividend of the share holding divided by the total cost of the holding.

When you come to sell, you just get the price you sell them at, whether for the entire holding or a part thereof.

[alansmith23] 18/9/2005 17:28

can anyone help me with the answer to what I suspect is a basic question?

I forst bought HWY at 33p and at that time it had an 8% yield. Now they've raised the dividend, does the payout on my original shares increase - ie are my shares bought at 33p now yielding say 12% or does the pence per share payout remain fixed at 8%? I think the former is the case.

Which brings me to the next part of the question -

If I'm right and the former is the case, I bought another tranche of HWY at 58p. So they have a different yield. I trade online (with IMIWEB) and I thought the tow buys would show up seperately in my account but they've been lumped together so it shows a one block of HWY shares. But surely selling my original HWY shares bought at 33p and selling my new HWY shares bought at 58p are completely different things as they have different yields?

I'm quite confused about this, can anyone advise? Thanks in advance

[lambo2] 15/9/2005 08:08

jwe - 14 Sep'05 - 20:10 - 165 of 165


lambo2-its a cross trade meaning it was a matched sell and buy at an agreed price(60p in this case).Whether its reflected in the price i don`t know as there has certainly been at least one very large seller since the results,if that seller has now been cleared and there is continued retail demand the price will rise.

Thanks for the reply that makes sense!
Regards

[jwe] 14/9/2005 19:10

lambo2-its a cross trade meaning it was a matched sell and buy at an agreed price(60p in this case).Whether its reflected in the price i don`t know as there has certainly been at least one very large seller since the results,if that seller has now been cleared and there is continued retail demand the price will rise.

[lambo2] 14/9/2005 18:49

jwe - 14 Sep'05 - 17:08 - 162 of 163


Somebody has bought 1.5M at 60p!!


How does someone mangage to buy that quantity of shares at that time- not that I'm complaining and will it refect in tommorrows share price?

[firth] 14/9/2005 18:42

dellanddave
In case you have trouble getting robbie burns web page,it is www.frequenttrader.info

[jwe] 14/9/2005 16:08

Somebody has bought 1.5M at 60p!!

[factsonly] 14/9/2005 10:20

I reckon Chris Mills will regret selling HWY. Not all income funds have bought into HWY yet.

[dave88] 14/9/2005 07:58

www.nakedtrader.co.uk

[dellandave] 14/9/2005 07:55

where do we find this robbie burns on the net?

[eipgam] 13/9/2005 14:52

from Citywire today:

Shrewd Snapshot: Mills books profits
Published: 08:03 Monday 12 September 2005 TOTAL PAGES: 2
By: Graeme Davies, Investment Correspondent

Activist investor Chris Mills has taken profits on his holdings in Simon Group and Highway Insurance Holdings