Smith (ds) Share Discussion Threads

[marksp2011] 07/6/2021 14:32

Good luck to you Buyzantium

i thought hard about this one. Either buy more or sell out and chose the latter. yep...I might get taken out in a bid but i think the next results will be pants and, this has been a serial disappointer for me.

Rode it up from last year but there are better opportunities that don't need a bid to make them happen.

[buyzantium] 07/6/2021 14:26

Marksp2011Loved your driving analogy but it makes me wonder whether you ever look at a map prior to your journeys. Good luck with your ventures I think you may come to regret your decision today.

[marksp2011] 07/6/2021 12:27

Thats it I am out

I am not expecting good news in the next results as cost pressures on inputs and stickiness in raising prices will result in compressed margins.

Might be wrong but if we are going to get more inflation then there are other places to go I think

[marksp2011] 06/6/2021 14:56

Buyzantium

price charts are based on past values of a single variable and cannot forecast a turning point. Driving a car by looking in the rear view mirror.

They DO work sometimes......if enough people believe that the chart is forecasting a rise then, the share price will rise. It is a self fulfilling prophesy. If we all think SMDS will double so buy, buy, buy, it will double or triple etc.....and then we call ourselves momentum traders.

I don't see the benefit of chartists who claim they can see 1,2,3 waves - The muppet who drew a line on the LLOY chart and forecast 7p..... (i couldn't work out why he forecast 7p, the line I drew hit 0) I bought at 29.9 - I could be waiting a long time for 7p

There is no empirical evidence that supports Elliott Waves. None. There is a lot of evidence that supports the idea that on less liquid stocks enough people trading can create a wave pattern.

I still think SMDS was a mistake as an investment and I will probably offload on 9th ready for the monthly reinvestment run at AJB. i will split the money from my 2k over some of my fav investment trusts

[buyzantium] 03/6/2021 05:35

Just look at the 3 year chart.

[jeffian] 02/6/2021 18:11

I didn't understand a word of that but would be very happy if it did!

[buyzantium] 02/6/2021 10:21

Amateur Chart View - late 2019 broke down below 400 and remained so with a broad and classic double bottom in May and late 2020. This present and maintained break through 400 heralds I would venture to suggest a gradual climb to above 500 in the medium term.

[phillis] 25/5/2021 11:13

The poorest performer is the most likely to be taken out

[buyzantium] 25/5/2021 08:03

Extract from 'Directors Talk' yesterday.There are nine analysts in total covering the company. The range between the high target price and low target price is between £5.86 and £3.65 and has a mean target at £4.98. Now with the previous closing price of £4.20 this would indicate that there is a potential upside of 18.4%. The day 50 moving average is £4.18 and the 200 day moving average is £3.86. The company has a market capitalisation of £6b.

[marktime1231] 24/5/2021 12:01

Not sure of your point there marksp, and I am guilty of straying this topic away from SMDS where I have been a long term frustrated holder, down to my last few shares in the hope it would start repaying investor patience with good income again, only holding on for a better price and in the interests of diversity. Your general rotation from frothy over-priced growth stocks to cheap solid value was a good idea and well timed, but the bargains are getting harder to find and income is not so attractive. Where to emphasise now is harder to judge.

LGEN is a core holding and preferred to others in the sector, trust in Nigel Wilson. Not terrific growth nor get rich quick it is steady good income payer which you can retire safely on. Lucky to add some at bargain prices last year, mostly still held.

[marktime1231] 23/5/2021 20:21

Quite right, you don't even know for sure that a market has peaked until it is tumbling down a slippery slope nor can you be sure of the bottom. But when the conviction or evidence is strong you need to be brave and respond. You don't have to move in one go, do it in steps.

The FTSE peaked in early 2020, the global covid pivot was 22 Feb, but it took me the next ten days to summon the courage to sell down several of my more volatile holdings ... SMT for example peaked around 650p but I didn't sell down until it hit 580p on 2 Mar, and began rebuying at 490p on 16 Mar even though the very bottom was a few days later at 470p. The timing was slightly off, it is impossible to always get it perfectly right, but the manoeuvre here and elsewhere put me 20% ahead of a stay-put strategy.

In case you were wondering I have since sold down SMT in late 2020 and early 2021, slightly short of the absolute peak when it boiled over to 1400p, rebuying in early March after the 30% correction.

The returns from this little bit of trading around the peaks and troughs make a significant difference to portfolio performance, but I am not generally a day trader nor a spread better. An active investor, because you do need to speculate to accumulate. Using the cycles you can beat passive investing, you can certainly beat the conservative fund managers who say stay put because they earn their fees never mind how badly your pension with them does.

If you can't beat a passive fund then ...

[jeffian] 23/5/2021 19:03

Easier said than done. If my wife looks over my shoulder when I am looking at our portfolio or individual shares, she points to the high point on the graph and says firmly "I would have sold there".

[marktime1231] 23/5/2021 18:44

Agreed the numbers are telling. You can of course choose numbers to tell a story which suits, but if you are comparing like with like and without bias to a particular timeframe then such analysis can be very revealing.

SMDS lost their buy-and-hold tag when it overpaid then withdrew dividends. LGEN in contrast has navigated choppy waters but kept the high income flowing and deserves its buy-and-hold status. Both have enjoyed a welcome post-covid price recovery, but are still 10-20% cheap. However I will be offloading SMDS when it looks fully valued with or without a takeover, while staying fully invested in LGEN indefinitely.

What benchmark do you test yourself against over the long term, inflation is too easy. The property price index, FTSE100 or MSCI World ... well some or all of those, but do so on a compounding total return basis, so include net income from dividends or rental as if they are reinvested immediately.

And do not bias your results by choosing a flattering timeframe. The FTSE100 price index is up about 17% over 12 months May-to-May but was pretty flat Feb-to-Feb.

Over twenty two years in the FTSE100 you would have made little ground over inflation on a pure buy-and-hold basis even with income reinvested, but if we had halved at the peaks and bought back in at the troughs over the three most obvious market cycles ... well that way we would have nearly trebled.

Buy-and-hold as a permanent fixed frame of mind is potentially damaging, you can do so much better with a little bit of agility, even if you do not time the cycles perfectly and only trade a slice while keeping a core holding.

[marksp2011] 23/5/2021 13:22

You are welcome. I give no advice. the numbers are the numbers.
I am tempted to hang on for a while too more as a Special Situation than any belief that SMDS management will do any better. It isn't as though they are new to the game. In common with many others I think they are confused as to what their role is ie to make money for us. If I want "social responsibility" I give to charity.

[buyzantium] 23/5/2021 13:14

Marksp2011 - thank you for your valued input. Much appreciated. I shall maintain my holding as I believe that atakeover is still more than just a possibility.

[marksp2011] 23/5/2021 10:54

Whilst I am on a roll

Taylor Wimpey 5 year total return annualised .....2.4%
LGEN ...9.9%
VOD MINUS 4.5%
GSK.........4.09
RIO....30.94
RDSB ...2.93

it is quite sobering

I hold healthcare via BBH....... That has a 3 year trackrecord and is on 18.67% Total return annualised. GSK in that period is 2.14 and AZN 17.45
BBH has much less volatility and beats both UK majors.

makes you think doesn't it :)

[marksp2011] 23/5/2021 09:42

marktime - Thanks for the comment - I appreciate it.

Comparing choices against VWRL is fairly shocking especially if the viewer has suffered from home bias and digging around in the UK markets.

I have 2000 SMDS that are in good profit, I have been in and out over the years but, fundamentally the industry hasn't been able to turn the story into cash. SMDS has the added drag of a pretty poor management team

I chart things (why I posted that in the first place)...... stock price v a sector ETF where I can find one v VWRL v Fundsmith Equity.

In the main, not wishing to single out SMDS the answer is pretty obvious for most stocks

i am holding 50K LLOY shares I bought those from 29-32p so LLoyds is a great stock... 70-80p looks easy over the next 12 months. As an investment, at current price the 5 year return is MINUS 3.3% Fundsmith is PLUS 18% so 22% difference each and every year for the last 5 years. On a 10 year view, LLOY is about 2% and Fsmith is 17.8%

What I have drawn from this..........

Trade if you want but think carefully about what you are holding for the long term. be really honest with yourself about your own stock picking skills - i run my own pension - the core holdings have had one change in nearly 3 years and I am beating VWRL. No skill required, no trading, no timing and much less volatility. But not as much fun.

i am moving to 90% in the long term never touch and 10% on relatively low leverage CFDs where I can trade in/out with ease and get my adrenalin fix.

[dssmith51] 22/5/2021 22:19

I agree there needs to be some consolidation, resulting in fewer suppliers. SMDS in the past has overpaid when agreeing a “takeover̶1; which has over the period depressed the share price. I’d like to think SMDS is primed to be bought out. Will that happen? Maybe!

[kazoom] 22/5/2021 21:17

Being bought is usually the better outcome for shareholders!

[moorsie2] 22/5/2021 21:12

The industry needs more consolidation to positively impact porters 5 forces

Smds need to merge or sell

[marktime1231] 22/5/2021 11:54

That is really impressive marksp, a candidate for post of the year.

It is also a devastating criticism, not just of SMDS but of the whole packaging industry which has been unable to deliver 20% annualised returns during a period where a dominant developed-world theme has been the shift from high street to online consumerism of packaged goods with delivery in a package. Like other investors I have been fooled by the logic that someone ought to be making their fortune through packaging when the financials demonstrate making money from this sector does not necessarily follow.

My take is that, despite the industry being dominated by big players, there is still too much competition, price constraints without control of costs. Giant buyers are dictating to their supply chain. At some stage in the period all of them seem to have experienced difficulties caused by mergers or debt or whatever, none of them draw praise for excellent strategy or management.

SKG stands above but it has wooed investors with high payouts, is it sustainable and invested for the future? SMDS stands below but it has cut payments to tackle debt which might turn out to be a clever move if the cost of borrowing rises strongly, and argues it has been positioning for the future?

On the other hand performance of these packaging companies has been OK for large cap mature businesses in markets which have been bumpy, with the exception of SMDS which has underperformed its own index the FTSE which in turn has lagged the world.

The conventional explanation is that the FTSE and so SMDS are cheap.

Maybe it is because we / they are under-performers?

[ygor705] 18/5/2021 09:03

The chart here looks to be a perfect representation of a) the sector that the company is operating within (growth) and b) the quality of its management (poor). The trend is positive but tediously in unexciting. I see no major change to the status quo unless either management is given a good shake or a predator appears.