Vodafone Share Discussion Threads

[isis] 19/3/2024 22:29

No. It's a bit weird that! Obviously someone is influencing their decisions. They're not even obvious shorts. DLG is on a bid and ITV have a big share buyback programme! lol

[diku] 19/3/2024 22:16

Do UK Pension Plan Investment Board short Canadian shares or any other shares?...

[isis] 19/3/2024 21:56

The Canadian Pension Fund which is mainly owned by their Government is abnormal to short UK stocks as they do!
We are a much larger economy than them ffs! lol

Short Positions for Canada Pension Plan Investment Board
Canada Pension Plan Investment Board Open Short Positions
Company % Short Change Date Changed
Marks & Spencer (MKS) 0.50% 0.00% 18 Mar 2024
BT (BT.A) 0.65% 0.14% 15 Mar 2024
Abrdn (ABDN) 0.79% -0.01% 5 Mar 2024
ITV (ITV) 0.61% 0.09% 20 Dec 2023
Hargreaves Lansdown (HL.) 1.01% -0.10% 12 Dec 2023
Kingfisher (KGF) 1.08% -0.10% 28 Sep 2023

Canada Pension Plan Investment Board Historical Short Positions
Company % Short Date Changed
Abrdn (ABDN) 0.80% 22 Feb 2024
Abrdn (ABDN) 0.71% 16 Feb 2024
BT (BT.A) 0.51% 16 Feb 2024
Abrdn (ABDN) 0.63% 12 Feb 2024
Abrdn (ABDN) 0.55% 8 Feb 2024
ITV (ITV) 0.52% 15 Dec 2023
Marks & Spencer (MKS) 0.50% 13 Oct 2023
Kingfisher (KGF) 1.19% 26 Sep 2023
Kingfisher (KGF) 1.27% 22 Sep 2023
Kingfisher (KGF) 1.36% 21 Sep 2023
Kingfisher (KGF) 1.41% 8 Sep 2023
Kingfisher (KGF) 1.34% 7 Sep 2023
Kingfisher (KGF) 1.22% 5 Sep 2023

[isis] 19/3/2024 21:37

it is a big Director purchase and just shows the arrogance of the manipulators that can control stock prices despite any good news.
Would not happen in the States the PI's would blow them out of the Water!

[diku] 19/3/2024 19:07

Yes...



philanderer19 Mar '24 - 14:37 - 8030 of 8034
0 0 1
Chartwise if 66p goes, back to test 63p

[watfordhornet] 19/3/2024 19:01

Guessing that no more significant news in pipeline given the CFO bought shares.Obviously a positive he bought but does signal that no other significant discussions underway other than those announced

[veryniceperson] 19/3/2024 18:49

Perhaps they've had the nod on the merger with 3 going through. They've also going to buy back 4 billion pounds worth of shares back. Paying down a lot of debt, think how much that will save them? It's probably a good long-term investment now. I won't add any more to my holding, I've got rather a lot by averaging down. But now I'm a lot happier holding than I was.

[davius] 19/3/2024 18:06

Probably worth adding that Luka is now down £77K since buying stock last week.

Della Vale is down £889K on her £6.25m share award.

And the board as a whole are down £4.3m on the £30.4m they awarded themselves.

[jrphoenixw2] 19/3/2024 17:51

Follow-up to my #3127^ re: a gap from 14/3 close to 15/3. This was between 66.09 and 67.50.

This gap is now largely filled, the low today having been 66.23p. Ie just 66.09-66.29 to possibly back-track and fill. The market psychology of gap-filling I'll leave to others. My 2C is that gaps do seem to get filled, esp one as narrow and short-lived as this. Ie my view is 66.09 is acting like a magnet and will shortly get revisited before long.

[davius] 19/3/2024 17:50

Stockwatch: is it time to buy Vodafone shares?

Vodafone’s finances can look worrying, but analyst Edmond Jackson likes the investment case and believes this director’s share buying is too big to ignore.

19th March 2024 12:26

by Edmond Jackson from interactive investor

Share trading by a chief financial officer (CFO) can be the most pertinent to watch given they are closest to company finances, and not being as well paid as a CEO, may mean exercising greater care.

Many director dealings announcements nowadays involve non-executive directors given executives have substantial share option schemes, although such purchases can be to comply with contractual obligations that they hold a certain amount of shares rather than a reaction to value offered.

So it is an eye-popper how Luka Mucic, the CFO of Vodafone, has spent over £1.7 million on shares in the company at 69.6p. It is the biggest share purchase by a CFO I have ever seen. For context, page 191 of the 2022 annual report cites £7 million total annual director remuneration by way of salaries and incentive schemes. It would have been far better to show what each director gets by way of remuneration elements, but still implies he could have staked at least three years of his after-tax income in this deal.

In most situations, such a buy would have electrified interest, but it is a reflection of current jaundice towards telecom stocks, how Vodafone Group slipped nearly 4% yesterday to close at 67.6p. Indeed, BT Group fell the exact same amount to 105p. In early dealings today, the erosion continued.

It raises stark questions about pricing of FTSE 100 stocks which you would assume is reasonably efficient. Yet the market is trending opposite to what a CFO implies, screaming value. In one of his annual reports, Warren Buffett has written words to the effect: “A stock that is large and widely followed can be the more irrationally valued.”

Is market right or wrong with Vodafone shares near all-time low?
Its current level is just above the 63p multi-decade low seen just a month or so ago, albeit well down on highs of over 200p in 2014 to 2017. You could regard the chart as potentially in the early stage of building a support level, but this is not in place and a bullish “bowl” formation would be some way off, for what chart folklore is worth.

If consensus forecasts are at all credible, the dividend yield is currently just over 11% based on a payout of 9 euro cents for the year ended 31 March 2024, and about 5.7% based on the planned halving of the dividend for the current financial year.

In principle, this not only looks a highly attractive yield but, if by any means realistic, implies the stock also at some point will rise. In practice, it flags perception of high financial risks and many investors have been attracted to Vodafone’s yield, then suffered paper losses.

Last November’s interim results to 30 September portrayed a declining dynamic with a 4% reduction in revenue but 44% drop in operating profit to €1.7 billion (£1.4 billion) - classic “operational gearing”. Higher interest rates on €58 billion of net debt then whittled pre-tax profit down by 67% to €550 million and to a net loss after a €705 million tax charge. The only positive being that tax authorities have taken a higher view of profit.

An uneasy income statement continued into the cash flow profile, where investment took €3.8 billion of €5.5 billion generated from operations, down 12%. Some €5.5 billion then justifiably went on repaying borrowings, €1.1 billion on interest and nearly €1.4 billion on various dividends. The total financing outflow was € 6.4 billion and net cash outflow €4.6 billion. So, while the recent dividend policy has been possible, the market has perceived it as not necessarily prudent.

Vodafone - financial summary
Year end 31 Mar

2016 2017 2018 2019 2020 2021 2022 2023
Revenue (€ million) 49,810 47,631 46,571 43,666 44,974 43,809 45,580 45,706
Operating margin (%) 2.7 7.8 9.2 -2.2 9.1 11.7 12.8 31.3
Operating profit (€m) 1,320 3,725 4,299 -951 4,099 5,129 5,813 14,296
Net profit (€m) -5,405 -6,297 2,439 -8,020 -920 59.0 2,237 11,838
Reported EPS (euro cents) -20.3 -7.8 15.8 -16.2 -3.1 0.2 7.7 42.6
Normalised EPS (cents) -18.0 -9.8 16.3 -6.7 -7.9 2.6 8.3 13.0
Ops cashflow/share (cents) 53.7 50.8 48.8 47.0 59.1 58.0 62.1 65.0
Capex/share (cents) 52.0 31.7 29.3 29.5 25.8 29.1 31.1 33.2
Free cashflow/share (cents) 1.7 19.2 19.5 17.5 33.2 28.9 31.0 31.8
Dividend/share (cents) 14.4 14.8 15.1 9.2 8.9 9.2 9.0 8.9
Earnings cover (x) -1.4 -0.5 1.1 -1.8 -0.4 0.0 0.8 4.8
Return on capital (%) 1.0 3.3 4.0 -0.8 3.0 4.1 4.8 11.8
Cash (€m) 18,259 14,955 13,469 26,649 20,646 14,980 15,427 18,722
Net debt (€m) 38,793 31,314 29,512 26,306 54,279 52,780 54,665 47,668
Net asset value (€m) 83,325 72,200 67,640 62,218 61,410 55,804 54,783 63,399
Net asset value/share (cents) 314 271 254 228 229 198 193 235
Source: historic company REFS and company accounts

Yet confirmation on 15 March of the sale of Vodafone Italy to Swisscom for €8 billion upfront cash implies the balancing act stands a fair chance of continuing, versus nearly €2.5 billion going out as dividends – based on the 9 cents per share annual payout - with $4 billion said to be returned to shareholders via buybacks.

Obviously, disposals are no enduring prop, the underlying trajectory of operations is vital. A 5 February trading update in respect of Vodafone’s third quarter to end-2023, cited organic growth of 4.7% despite disposals meaning a slight 1.4% slip in reported revenue. It was reassuring how 14 out of 17 markets were said to be growing.

Nods to modernisation were made by way of Cloud and Internet of Things services growing over 20%, probably small in an overall context. “We’ve also begun strategic partnerships with Microsoft and Accenture to fast-track our transformation,̶1; it said.

Germany edged slightly better, with both reported and organic growth up 0.3% to near €2.9 billion. Yet there appears unease in the market about how this division constitutes a quarter of group revenue and its chief executive of two years is being replaced. Frets also exist about whether a merger with Three in the UK will pass regulatory scrutiny.

The shares do however look to price in much of this distress. If consensus for around €2.0 billion net profit in the current year to 31 March is fair, the forward price/earnings (PE) ratio is around 9x, although it’s unclear quite how realistic is the €2.4 billion profit targeted for March 2025.

With 75% of €61.6 billion net assets constituting goodwill/intangibles, €15.2 billion net tangible assets imply 48p a share – assets ultimately being worth what they can earn.

Significant uncertainty is involved here but my sense is that the CFO thinks this works more in his favour – to grasp substantial Vodafone equity at its current price, despite its "falling knife" semblance.

If fundamentals were deteriorating to an extent that it leaves equity value exposed, hedge funds would be over Vodafone like a rash. But you have to go back to 2022 to find any. Marshall Wace, which I tend to regard as a benchmark for well-judged short-selling, went below 0.5% exposure in autumn 2021. Who knows if it is still short?

BT, by comparison, has nearly 2.6% of its share capital out on loan, with AKO Capital having edged over 0.9% on 7 March, while the Canada Pension Plan Investment Board stayed flat at 0.5% and BlackRock, also Kintbury Capital, trimmed theirs slightly below 0.6%. Those are still substantial shorts for a £10 billion company and, as of last September, none were disclosed. To an extent they will be taking a view on telecoms besides BT specifically.

For me, the sheer scale of this director buying – and it being the CFO – tilts me towards a sense that the shares have fallen to a level where risk/reward has become attractive. Sentiment is too dire versus Vodafone’s underlying dynamic.

Obviously, most of us do not have the income base of senior telecoms bosses should things not turn out as hoped. But this trade looks an indicator to consider averaging in. Buy.

[philanderer] 19/3/2024 14:37

Chartwise if 66p goes, back to test 63p

[isis] 19/3/2024 13:37

UK Hedge Funds are really the old Skool Stockbrokers, well connected and astute at making money.
Stockbroking died when the Internet took over, only a handful left.

[isis] 19/3/2024 13:15

Even with half price Dividend still pays 5.5% which is higher than FTSE average.
Not often you see a Director buying in the millions, sure sign things aren't all that bad imo

[diku] 19/3/2024 13:07

If the divi is cut and rebased surely we will not see 100p for a very long time...

[xcap1] 19/3/2024 10:52

Short selling might shine for the short term but this a long play

[xcap1] 19/3/2024 10:51

And you don't appoint the world top law firm to advise on regulatory matters and agree a €150m break fee to Swisscom without a fairly high degree of certainty

[xcap1] 19/3/2024 10:46

FTSE 100 I mean

[xcap1] 19/3/2024 10:45

Once the regulatory clearances are confirmed (hopefully ofc) has to be one of the best recovery plays on ftse

[xcap1] 19/3/2024 10:43

Although still yielding 3.6% after cut, and with future rising profits dividends will increase , with current debt level servicing I can't understand why the dividend wasn't right sized sooner Plus don't forget the massive share buyback programme

[blackhorse23] 19/3/2024 10:39

Dividend cut by 50% from 2025

[isis] 19/3/2024 10:23

So how do you execute a trade that's automatic?

Traders are rarely privy to the bigger picture.

[dplewis1] 19/3/2024 10:22

Done various roles in the city, including an algo execution trader for a hedge fund.. but whatever, you keep blaming the bots

[isis] 19/3/2024 10:18

Also the BOT trades are not generally subject to Stamp Duty or Commission.

I actually think that some of the biggest losers are Spreadbetters who lose 80% of their money. Even states that on their websites.

[dplewis1] 19/3/2024 10:10

Ok David Icke