Dog Conviction fund

[Walrus]

I am setting up a notional dogs conviction fund of 10 shares split equally. At the moment I'm thinking

Centrica
BT
Vodafone
IMB
Petrofac
Kraft
IG
GVC
Lloyds

I'm looking for one other. Would like Oil but don't think I can really class Shell or BP as dogs. Any suggestions or thoughts on the above. Will run this as a notional portfolio from Friday.

[monabri]

Standard Life Aberdeen

WPP

Surely you can hear the howling?

[CryptoPlankton]

Barklays?

[GoSeigen]

I am setting up a notional dogs conviction fund of 10 shares split equally. At the moment I'm thinking

Centrica
BT
Vodafone
IMB
Petrofac
Kraft
IG
GVC
Lloyds

I'm looking for one other. Would like Oil but don't think I can really class Shell or BP as dogs. Any suggestions or thoughts on the above. Will run this as a notional portfolio from Friday.

Excuse my ignorance, but definition of a dog?

GS

[SalvorHardin]

Since you've got Kraft in your list how about another American company; General Electric. Although its share price is up by some 27% this year it's still down by 62% over five years. It was ejected from the Dow Jones Index last year having been a member since 1885.

It's not something I'd buy nowadays, but twenty years ago when I was still working I would have been tempted. For me there are too many unknowns. It's going through a massive reconstruction, what horrors are lurking in its finance arm (GE Capital), suspicions over its accounting and that the company is under investigation by both the US Department of Justice and the SEC. Massive dividend cut plus asset writedowns which are several times larger than Kraft's recent writeoffs.

https://uk.reuters.com/article/us-ge-re ... KKCN1N41BJ

The US Fool has quite a few articles on GE which summarise the situation quite nicely:

https://www.fool.com/investing/2019/02/ ... can-m.aspx

[Walrus]

I am setting up a notional dogs conviction fund of 10 shares split equally. At the moment I'm thinking

Centrica
BT
Vodafone
IMB
Petrofac
Kraft
IG
GVC
Lloyds

I'm looking for one other. Would like Oil but don't think I can really class Shell or BP as dogs. Any suggestions or thoughts on the above. Will run this as a notional portfolio from Friday.

Excuse my ignorance, but definition of a dog?

GS

I guess I'm looking for high yielding income stocks that have fallen off a cliff capital value wise over the last 1e months.

Therefore all shares that I'd suggest lie in the riskier end of the spectrum for HYP but offer potential recovery play.

[Walrus]

Since you've got Kraft in your list how about another American company; General Electric. Although its share price is up by some 27% this year it's still down by 62% over five years. It was ejected from the Dow Jones Index last year having been a member since 1885.

It's not something I'd buy nowadays, but twenty years ago when I was still working I would have been tempted. For me there are too many unknowns. It's going through a massive reconstruction, what horrors are lurking in its finance arm (GE Capital), suspicions over its accounting and that the company is under investigation by both the US Department of Justice and the SEC. Massive dividend cut plus asset writedowns which are several times larger than Kraft's recent writeoffs.

https://uk.reuters.com/article/us-ge-re ... KKCN1N41BJ

The US Fool has quite a few articles on GE which summarise the situation quite nicely:

https://www.fool.com/investing/2019/02/ ... can-m.aspx

Have been considering investing in GE for a while, just find it all too confusing to work out if it's a good deal or not. Also I believe they've cut the dividend significantly ?

[tjh290633]

Have you looked at IMI? Yield 4.3% and down about 30% from their recent peak.

TJH

[SalvorHardin]

Have been considering investing in GE for a while, just find it all too confusing to work out if it's a good deal or not. Also I believe they've cut the dividend significantly ?

I did have a closer look having posted about it. I decided that it is too hard for me to value.

Sometimes the best thing to do is to do nothing. It's just like Warren Buffett's baseball analogy; you don't need to swing at every pitch and you can't be called out because you didn't buy the share.

https://www.cnbc.com/2017/02/02/warren- ... alogy.html

As a punt in a competition/no cash trial portfolio GE is a decent candidate, especially for what can be learned by following it. So much has gone wrong yet GE still owns world class subsidiaries. It's just a shame about the other stuff (especially the accounting).

Yes to the dividend cut. From 12 cents a quarter to just 1 cent.

https://m.nasdaq.com/symbol/ge/dividend-history

[Breelander]

Excuse my ignorance, but definition of a dog?

The ‘dogs’ investment strategy has been around for years and is very simple. Buy the 10 highest-yield stocks of an index, such as the FTSE 100, at the start of the year and sell them at the end.

https://www.fool.co.uk/investing/2018/1 ... s-of-2019/

I am setting up a notional dogs conviction fund of 10 shares split equally. At the moment I'm thinking

Centrica
BT
Vodafone
IMB
Petrofac
Kraft
IG
GVC
Lloyds

I'm looking for one other....

I wish you well. As I said when you first posted that list on another thread, three of my five topups earlier this month are the top three in your list.
https://www.lemonfool.co.uk/viewtopic.php?f=15&t=16662

Have you looked at IMI? Yield 4.3% and down about 30% from their recent peak.

...and that was my fourth

[Alaric]

Excuse my ignorance, but definition of a dog?

TMF in the quoted article were doing it by dividend yield from the top downwards. Another approach is to take the worst performers over the previous year.

[Walrus]

Excuse my ignorance, but definition of a dog?

TMF in the quoted article were doing it by dividend yield from the top downwards. Another approach is to take the worst performers over the previous year.

Yes was trying to add a little both of stock selection into the mix rather than a formulaic selection.

Will provide my flawed rationale for selection and potential upside as part of the portfolio update.

Maybe the bombed out car industry and BMW/Daimler may be something I look at

[UncleEbenezer]

Another approach is to take the worst performers over the previous year.

Carillion and Interserve? Do you have or eat your CAKE?

On a more serious note, surely a canine approach doesn't really fit with classic diversification, 'cos of whole-sector swings? Isn't the best dog one that has been dragged down by sector sentiment while retaining good fundamentals?

[hiriskpaul]

2 oil E&P dog companies that spring to mind are Premier Oil and Enquest. The main problem with both is the amount of debt they hold. The production side of both is doing well. Enquest reported today and I am still wading through the results, but so far it all looks pretty good. Of the 2, Premier is larger and is in better shape. Enquest is very much a small cap, but is at least main market listed.

I only hold the debt of PMO/ENQ, so my priorities are a little different to shareholders*. The last thing I want to see is either company pay dividends!

* although I do hold some Premier Oil warrants.

[monabri]

Walrus,

How about two dog funds..."big dog" and "little dog" (as determined by market cap)?

[kempiejon]

How about Royal Mail or Plus500,

[tjh290633]

You no doubt all recall "Dogs of the Dow" or "Dogs of the FTSE". They selected the five shares with the highest yield and the lowest share price.

The lowest share price never made sense, because of the wide range of them. For example, you have LLOY at about 61p and RB. at £61. It has to look at percentage change relative to the market over a given period.

TJH

[Walrus]

Dog Fund Selection is complete. Prices will be Friday close. A number have started performing in the last week buy hey ho perhaps momentum may help.

The reason for executing trades today is my suspicion that you can catch some upside on cash being put into Pensions and ISAs at the end of the year and the beginning of the tax year. My expectation is that this thread may highlight the dangers of PI theme/Gut feeling investing but we will see.

So the runners and riders


Apple PE 15ish

Dog perhaps harsh but underperforming it's FANG peers. Pays a dividend on a reasonable PE with a ton of cash in the bank. All the youth I see have Apple use apple and won't consider any alternative. 10 percent of the ISA in here.

BT PE 8 Yield 7.8

Owns EE a quality outfit in my view, in a sector which is here to stay. Huge barriers to entry in terms of investment outlay. Bombed out share price, can't really see you much downside here.

Centrica PE 10 Yield 10

Dividend has to be under threat, but British gas brand must have some value. Gas is here to stay as post a thermal energy source and for heating. Potential for further consolidation in Western Europe for energy players. Real punty this one but appears quiet cheap. Also has interests in the US.

GVC PE 7 Yield 5.7

Looks very cheap. Directors selling off huge holdings a major red flag. However with the potential for a US boom think it's worth a slug of capital. Another big punt on regulation.

GE

Total dark horse share price has been recovering but still at generational lows. Has world class business the renewables sector but challenging to value. Have a gt feeling that the conglomerate is valued cheaper than the sjm of its parts.

IMB PE 9.6 DY 7.1

Absolute cash cow. Continuing to increase dividends. Again has regulatory risk but I don't see the end of tobacco any time soon, potential upside of cannabis and alternatives.

Other selections

Kraft
Petrofac
Vodafone
Lloyds

[Walrus]

Well one month in and the Dog Conviction Fund has had a shocking start.

Three double digit losers and a chunky loss in BT.

Petrofac -18%
Centrica -15%
Imperial - 13%
BT -6%


This fund has been seriously bad for your health if you are chaser of dogs.

Bright spots are Apple up 3%, GVC up 2 percent and marginal gains on GE.



Hmmmm, Average down on Petrofac perhaps.....

[Hariseldon58]

The dangers of capturing a falling knife ?