Phoenix Share Discussion Threads

[jonwig] 06/12/2013 07:30

So the TDR stake falls from 16% to 6%. Wherever it's gone, the takers must surely each have a notifiable amount, so we will be told.

The share price is still above the pre-AdminRe announcement level.

[philo124] 05/12/2013 16:20

Added 750 at 663.5p.

[scburbs] 05/12/2013 16:03

HVS, 660p it is, are you buying now?

I have taken some more at 660p. Will continue to buy in tranches as it falls.

[rickyy] 05/12/2013 15:14

8.5% or 8.8%, either is considerably better then the bank, and most other shares.

[speedsgh] 05/12/2013 12:03

scburbs - interestingly Digital Look are currently forecasting 59.37p for FY2014. not sure how they arrive at this figure (possibly an average of broker forecasts?) but that would put them on a prospective 8.8% at the current offer of 672p. prefer to manage my expectations a bit + go with your slightly more conservative forecast.

[scburbs] 05/12/2013 11:44

Very safe IMV (certainly very safe relatively to other comparable investments at that yield!).

They have cash balances of over £1bn, £430m of surplus in Phoenix Life and no major debt repayments until 2016 (£300m). This compares to the dividend cost of £125m.

I would have thought it would need a pretty bad sequence of events for them to cut the dividend, IMV they will increase it at the time of the 2014 interims to c.57p (for full year).

Based on a current price of 675p I suspect the prospective yield for 2014/15 is around 8.5%.

[hvs] 05/12/2013 09:50

How SAFE is it though ???

[scburbs] 05/12/2013 09:02

The yield will hit 8% at 667.5p, currently 7.85%.

[hydrus] 05/12/2013 08:57

What's the yield on these now?

[hvs] 05/12/2013 08:50

No hurry to buy.

I see 660p coming. I will wait.

[scburbs] 05/12/2013 08:48

Thanks Madmix.

Useful opportunity to pick up some more, so I have.

[madmix] 05/12/2013 08:23

In case you were wondering the reason for the drop :

"TDR Capital Sdn Bhd : completes accelerated bookbuild of 22 million shares in Phoenix Group Holdings at a price of £6.60 pence per share, raising gross proceeds of £145.2million - now hold approximately 14 million ordinary shares of Phoenix, representing approx 6% stake."

[philo124] 15/11/2013 16:28

Back in after selling on initial discussions.

[madmix] 14/11/2013 22:11

Agreed scburbs. I doubled my holding today at 716p.

[scburbs] 14/11/2013 17:01

Just about reaching 7.5% yield. I added a few more at the close. Difficult to find a 7.5% relatively safe yield with decent capital protection that also has potential dividend growth and capital upside.

[lynton3] 14/11/2013 15:56

Jonwig - yes, gearing is a significant difference between the two, but comparing their relative share prices over 1, 3 and 5 years shows that Chesnara is well ahead of Phoenix. I have topped up with a few more this afternoon and it is now one of my top 3 equity holdings! BTW, thanks for running this board; it is very helpful

[jonwig] 14/11/2013 10:24

lynton - I think the gearing explains the different valuations.

[jonwig] 14/11/2013 10:23

I can well imagine that Swiss Re wanted payment at its MCEV for Admin Re, in PHNX shares valued at around 75% of its own MCEV.

That would have been a pretty wide gulf to bridge. And no good for existing shareholders.

FT reckons there won't be other buyers in the wings:



Elsewhere: "FLASH: Deutsche Bank cuts Phoenix Group Holdings to hold from buy, 775p target unchanged - See more at: hxxp://www.stockmarketwire.com/article/4705969/FLASH-Deutsche-Bank-cuts-Phoenix-Group-Holdings-to-hold-from-buy-775p-target-unchanged.html#sthash.YoRbHlLh.dpuf"

[lynton3] 14/11/2013 10:22

It is interesting to compare this stock with Chesnara, which is in the same field but has a current yield 1.38% lower than Phoenix. It seems to me either Chesnara is expensive or Phoenix is not. I have topped up with some more Phoenix today, my feeling being it is getting almost impossible to buy any 7%+ yielding stocks now that look to have good prospects

[scburbs] 14/11/2013 08:20

Made a small buy back at this level reversing some of the top slicing I have done, but it would be nice for it to pull back (temporarily!) a bit closer to £7 for a more substantial acquisition.

[scburbs] 13/11/2013 22:08

Hyden,

I agree it is sad to see the deal fall apart, but my view is that PHNX should not overpay. The value of PHNX's shares (still very material discount to MCEV) constraints the apparent value they can provide to any sellers. Much better to pull out than overpay. From what I read the Swiss Re book is not very profitable. Whilst I would love PHNX management to give it the treatment and sort out the profitability I don't want them to have to give away a lot of that upside in the purchase price due to the lower rating afforded on the LSE.

The PHNX cashflow continues to be very strong and the degearing on track and to pay a significant premium just to accelerate that degearing seems unnecessary.

Clearly the value in the current book is ultimately limited, but it still seems pretty substantial compared to the current share price IMV.

I think there will be other acquisition opportunities and it is important they buy at a good price and if PHNX's rating isn't high enough to enable them to buy at a good price then they should just work with the current book until it is.

[hyden] 13/11/2013 20:33

I am somewhat sad to see this deal fall apart. Imo it was transformational for Phoenix and made the future seem much brighter. Imo there is only so much value that they can squeeze out of the existing book, and they have achieved a lot already. I worry that Phoenix may price themselves out of the market, just like Resolution. But at least Resolution still sells new business unlike Phoenix whose book is falling away at a rapid pace.

I would encourage Phoenix to consider that the first deal is worth paying a little more for given the transformational effect it will have and I hope that management come away from this affair a lot wiser. There are many other mid-sized books up for grabs but Phoenix will struggle to raise the debt, imo, which is why I was so attracted to this deal.

Although my post sounds negative, I do have a high regard for management and I hope to be eating my words within a year.

[jonwig] 13/11/2013 19:42

I'm pleased to hear you think that!

[scburbs] 13/11/2013 19:18

There could be a useful buying opportunity tomorrow.