Wentworth Resources Share Discussion Threads

[sunbed44] 11/1/2022 19:44

Slowly adding a few here under the radar I can see a bag here while retaining 7% return on his will get spotted soon so make the most while you can

[sunbed44] 07/1/2022 19:36

Great to see we retained our place on malcys bucket list and he threw ppc out which in my opinion is useless

[dbfromgb] 06/1/2022 14:31

Part of the problem is that the public financial forecasts eg Stockopedia are a complete mismatch compared to the latest Cenkos note. The first merely shows good value, but the latter exceptional value. I am happy to hold quite a view and looking forward to imminent operational update and then year end results when we will see which forecast is right. Also possibility of corporate action at any time, we know discussions are taking place, but will they come to anything?

[jonesy100] 06/1/2022 12:06

I hold long term and don't disagree with any of the comments here but it does worry me that there is so much selling into every rise. I was hoping to see more progress after the institutional clearance before Christmas but doesn't look like it.

[russman] 05/1/2022 18:34

Cash is earning zilch. So the buyback could be a saving on their future dividends (hopefully).

[sunbed44] 03/1/2022 18:08

Hi im not much of a technical guy but more fundamentals but its always good when both point us in the same direction. Surely this will become higher profile during the first part of 2022.

[sev22] 03/1/2022 17:59

The technical data is looking very promising as we enter the New Year:

[sunbed44] 02/1/2022 01:00

Omg its v quite on here unbelievable really but im sure we will see more activity soon tbh i can see a bag from here ty with 7% retained as a dividend yield. Am adding in bit here and quitely building a decent stake and income.

[sunbed44] 28/12/2021 01:36

I really cant believe how much under the radar this stock is. Got to be one of the best 7% dividend paying stock with good chance of 100% capital growth. Am adding slowly but surely.

[poleaxe] 21/12/2021 22:08

You are quite right loglorry the recent Lloyd's buy back being a prime example.

[loglorry1] 21/12/2021 08:21

I'll tell you what, I hate buybacks where the corp then hands the shares they bought to directors who then sell them!

There's a really good book called the Outsiders which looks at some brilliant CEOs who were fantastic capital allocators. The thesis of the book is that you buy great assets which throw off cash with expensive stock and then use the cash thrown off to buy back stock when its cheap. The author gives many examples where these great capital allocators did 10-30x in stock prices.

[gary1966] 20/12/2021 21:04

I wonder why the company didn’t take another 2.5m off AXA as their holding would of allowed it. Question is, who bought the rest.

[sunbed44] 20/12/2021 19:33

I cant believe how much under the radar this is. I dont have big holding but added £10k last week and will continue to at in around £10k chunks. There are not many shares that pay over 7% dividend whilst also have possibility of 50%plus of cap growth. I only see here along with DEC SEPL and SAVE

[drdre] 20/12/2021 19:13

Great discussion, a refreshing breath of fresh air on the boards. I view the buybacks as a positive for the same reasons loglorry articulated but I also agree with kenmitch - if push came to shove, I'd rather a dividend in my pocket. Hopefully we will see dividends increase here (10% past year) given the increasing (and fairly stable) nature of Tanzania demand for NG. GL all.

[kenmitch] 20/12/2021 17:54

Horndean Eagle

I agree with most of your post and have up ticked it. Good to see mostly well argued posts both for and against buybacks. Also yes, buybacks do mean higher eps. That’s why so many Company Directors love them so they buyback even when that share looks very fully priced! Their bonus payments are often based on eps.

[sunbed44] 20/12/2021 17:46

I prefer buyback as special divis are obs one offs whereas buybacks crystallise all higher future % divis for the long term.

[jonesy100] 20/12/2021 17:36

RNS this evening and Axa is out. Hopefully, with such a large seller clear, the price may now stabilise and start to rise to reflect real value

[brucie5] 20/12/2021 17:15

Thanks Ken. Glad to be reminded that you hold.

[horndean eagle] 20/12/2021 17:11

I know Ken has a an absolute hatred of buybacks and in many cases you can understand it. However with WEN they do not have commodity price risk unlike RIO for example. RIO become exceptionally flush with cash when commodity prices are high and therefore buying back stock doesn't make sense when the share price is high. WEN have a stable commodity price so it is a completely different story. It is almost utility like and therefore buybacks make sense in the absence of them returning huge amounts of cash as dividends. There is also an argument for buybacks when your shareholder base is running for the doors on ESG concerns. You would hope with reduced share count WEN will continue to bump up the dividend. Buyback is clearly materially earnings enhancing as well.

[kenmitch] 20/12/2021 17:09

Hi Brucie

Note that I posted that I also agreed with a lot of loglorry’s post! It was well argued unlike so many replies on buybacks.

Also usually it is impossible to know when a share rises after buybacks whether it would have done so anyway if subsequent news is positive. But fortunately WEN is a rare example where if the share rises significantly now it could well be because of buybacks, and the evidence would be stronger still if there are further buybacks.

Why?

Because WEN has struggled to get to and then stay above 26p for over 2 years and based on news, NAV and dividends the share has looked too cheap for ages. If that still applies after buybacks I rest my case. If the share now has a genuine good run,then yes, buybacks may well have helped!

Other points.

1. Re tax on special dividends. All my investments are in ISAs. Others have SIPPS as well. So the answer to that has been for years; take full advantage of the totally tax free ISA and SIPP opportunity.

2. Re that reply about Costa.

If that’s factually correct about Whitbread selling off the only part of their business that was profitable then that decision was as bad as was the subsequent wasting of the entire proceeds on buybacks.

Also that Costa/Whitbread example was just one of many many others!

e.g I was a long suffering Marks and Spencer shareholder when Stuart Rose kept claiming that he had rewarded we shareholders with £2 BILLION buybacks, mostly around £4. Reward? The share has from memory never reached £4 since then AND Marks has since issued all those shares back again in heavily discounted rights issues. As did the banks after their shares crashed in the banking crisis.

Finally, and admittedly several years ago, Morgan Stanley did very detailed research on every UK Company buying back shares. They found that Companies buying back subsequently saw their share prices underperform those in the sector that did not buy back.

I hold WEN and think they look very cheap!

[loglorry1] 20/12/2021 16:38

Problem with special divis is tax. It's not at all tax efficient (at leat not for me).

@Brucie5 - well I suppose a special divi for you would be a Brucie Bonus - C'awm on its christams!

[brucie5] 20/12/2021 14:05

Ken, nice to hear from you and not about to start an argument with someone as knowledgeable as yourself! But in this case I agree with loglorry.

Still, some special dividends on top would not certainly not go amiss!

Happy Christmas!

(btw, Picked up some IDHC & MCRO this morning off profits on GSK and EPI, which completes my purchases this side of 2021. I'm very happy to just continue taking the dividends on WEN)

[gary1966] 20/12/2021 14:02

A capital reduction would be an option rather than a buyback. Shareholders would then have the choice of using the cash realised on buying shares back. That is a type of share buyback that can work.

However I am happy with a large line of stock being taken out and will be delighted if they can snap up another 2.5m at 20p today. It may be that the holding that has been removed was the one that was depressing the share price.