Value / Income Investing

3rd Apr by bsharman

5 comments 341 reads

Thought I'd start a post on income investing as at unprecedented times like this for the global economy and volatility on stock markets, it is an opportunity to pick up value with a yield. I have recently lost a few preference shares as they will be cancelled by Aviva (Aviva (LON:AV.B) and General Accident (LON:GACA)) and the income from these.

It is difficult looking at the portfolio on days like today with a sea of red but are there any opportunities being thrown up by the market to lock in fantastic yields and buy assets for a recovery?

An example of one I got right in the past is TP Icap (LON:TCAP), which I bought in late 2021 at £1.34 and collected a high dividend since. The current yield on this initial investment is 21.5%

Another example is Sabre Insurance (LON:SBRE) which I have bought recently and has an x dividend date of the 17th of April for a large 8%!

Others I am watching or hold are:

GCP Infrastructure Investments (LON:GCP)

Safestore Holdings (LON:SAFE)

HICL Infrastructure (LON:HICL)

International Public Partnerships (LON:INPP)

I am holding some of the insurers such as Legal & General (LON:LGEN) for the high yields but I don't think they qualify as beaten down and potential for much capital growth.

I think the sweet spot is something like TP Icap (LON:TCAP) in 2021/22 and I'm looking for investment opportunities, which are cyclically beaten down with the market and higher interest rates but generating cash and income for investors i.e. relatively safe, undervalued, high yield (5% +) opportunities. Will look at anything including preference shares, investment trusts, corporate bonds and gilts. Any ideas welcome!

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intuitive6191

3rd Apr

"I have recently lost a few preference shares as they will be cancelled by Aviva (Aviva (LON:AV.B) and General Accident (LON:GACA)) and the income from these."

Likewise - though it has to be remembered that the vote has not yet taken place and historically such efforts to tamper with or cancel prefs has met with some opposition.

I tend to cycle long term in and out of prefs depending on where I think interest rates are likely to head. As you will know, spreads are not favourable so they are really a buy and hold investment.

Currently holding LLPD and STAB but am holding back on further purchases. I am expecting inflation to take off in Autumn and think that the BOE will have some problems balancing interest rates to cope with inflation and to generate growth.

Jon F

I recently read something on REA Holdings preference shares, R E A Holdings (LON:RE.B), though further investigation has so far drawn me a blank. I don't recall now where I read it either, though it could well have been the DSMR, here.

The investment case was along the lines of pays a good dividend (twice yearly) and has potential for growth back to par value (100p, currently trading at 81p) with a potential take out the company.

The website isn't very helpful, so my investigations so far haven't found out much. But it is a 9% cumulative share and last payment (December) was paid 4.5p (I guess it makes sense!).

Perhaps worth looking into, if you inclined and able.

Regards,
Jon

Looks like this might an interesting thread, thanks!

jjis

Hi Ben,

In the beaten down category you could take a look at Greencoat UK Wind Greencoat UK Wind (LON:UKW) in teh Green energy space which has fallen out of favour as bond yields rose. You could also take a look at CT Private Equity CT Private Equity Trust (LON:CTPE) which offers a decent / growing yield -see RNS today for a note from Kepler to learn more about it if you are not familiar with it.

While on the Property side of things you could consider London Metric Property Londonmetric Property (LON:LMP) well manged with plenty of industrial exposure and Primary Health Property Primary Health Properties (LON:PHP) which is in the news today with their bid for rival Assura £AGR. Largely government let properties & has steadily increased the dividend for many years.

Hope these are the sort of thing you were looking for.

Jamie

bsharman

Great thanks Jamie. Those are exactly the type of suggestions I was looking for and will do some research into CT Private Equity Trust (LON:CTPE), Greencoat UK Wind (LON:UKW) and Londonmetric Property (LON:LMP) - I am a holder of Assura (LON:AGR) and would prefer a cash exit on that one, so I can reinvest into other value situations. Land Securities (LON:LAND) might be another as its price to tangible book is 0.63 and pays an almost 6% dividend. Cheers.

Northender

Not sure if you've seen this thread as it shares some of the posters from the IT thread, where I think you sometimes post. I've found it interesting in the past.

https://www.stockopedia.com/co...

Value / Income Investing

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Bsharman

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