9% Yield on your money plus compound growth - HotUKDeals
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9% Yield on your money plus compound growth

avoint Avatar
6y, 8m agoPosted 6 years, 8 months ago
Serious tip. HMV today confirmed that they will maintain their dividend (currently around 7.4p) so with the share price at 90p this gives a great yield on your cash and does not take into account any share price growth. When you consider that they were at around £1.20 per share this could prove a double whammy. All you need to do is buy the shares.

Please note that the prices of shares can go up and down.
avoint Avatar
6y, 8m agoPosted 6 years, 8 months ago
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banned#1
What? Who buys DVDs/CDs/Blu rays anymore haven't you ever heard of torrents, digital download is the future.
#2
Ahh ha but they will be diversifying you see!
#3
avoint
Ahh ha but they will be diversifying you see!


By shutting down most of their shops. :roll:

I can't see them competing with the established names in the digital download business so what are they likely to do to revive their fortunes.

To be honest, I've had them down as one of the next major companies to disappear. But I could be wrong.
#4
I'm sorry but you do not understand the business model. HMV currently turnsover in excess of £1200M from online and high street sales. The diversification will entail further growth as well.
#6
avoint
I'm sorry but you do not understand the business model. HMV currently turnsover in excess of £1200M from online and high street sales. The diversification will entail further growth as well.


And Woolworths retail stores had a turnover in excess of £1.7bn before they went under. It depends whether you think that HMV's management is any better than Woolies'. I didn't risk buying Woolworths shares and I doubt I'll be taking a chance on HMV either.

I suggest having a look at HMV's balance sheet not reading puffs by share tippers.
#7
Woolies was stagnent and not open to change. I would like to know why Brokers are forecasting £1.20 as an average whilst you cannot see value?

I suggest you stick to Premium Bonds ;-)
#8
Sounds a fair go but you should mention that shares can go up as well as down (obvious but still) and that any transaction costs of buying and selling them needs to be deducted from the profits.
#9
alternate
Sounds a fair go but you should mention that shares can go up as well as down (obvious but still) and that any transaction costs of buying and selling them needs to be deducted from the profits.


I did mention shares can go up and down. Transaction costs should amount to around £30 to buy and sell.
#10
Released today

RNS Number : 2291J
HMV Group PLC
26 March 2010

?
26 March 2010




HMV Group Investor Update

HMV Group plc is today updating analysts, investors and media on its new
medium-term strategy.

Ø The Group's previous three-year transformation plan, set out in March 2007,
has successfully rebuilt profitability, with consensus forecasts for earnings
per share of 12.5p for the year ended April 2010, up from 8.7p in 2007.
Consequently, the Group is approaching its new strategic plan on a strong
financial footing.

Over the last three years, HMV UK has outperformed the music, visual and games
markets and rapidly developed as an entertainment brand. New and related
entertainment product categories have been successfully introduced into its
stores; and, as the value in the music market has increasingly moved to live, so
too has HMV, through the ownership of venues and related ticketing activities.

Building on this progress, the Group's medium-term strategy is clearly focused
on:

Ø further transforming HMV's offer by increasing sales of new product
categories, and continuing to outperform the changing markets for music, visual
and games
Ø growing rapidly in live and ticketing following the acquisition of MAMA; and
building a bigger presence in digital through our joint venture with 7digital.
Ø a turnaround at Waterstone's, including: revitalising the brand; repositioning
the range and local branch offer; maximising the Borders sales transfer
opportunity and realising the benefits available from the hub

By combining these strategic initiatives with the continued tight management of
costs and margins, the Group's target is to continue to deliver earnings growth
over the medium term, and to maintain the current level of dividend as it
rebuilds cover.
#11
Fag packet calculations:

So my bank gives me 2.75% interest at present. HMV is offering around 9% plus any compound share growth. That amounts to say 7.4p today. So by buying HMV I am covered to the downside at circa 80p and upside could go to £1.30+.

In real terms if I invest £5K, and nothing untoward happens, then in the bank I would receive £5137.50 less tax at 20% = £5110 (OK I could wrap this in an ISA too).

If I invest in HMV and they achieve the £1.30 within an ISA (zero tax) and based upon todays closing price I would receive 5000/0.87 = 5747 shares, less dealing charges say 5717 shares. If the above scenario played out then following the dividend my 5717 shares would be worth (5717 X £1.30) + (5717 X £0.074) = £7432.10 + £423.06 = £7855.16

Bank £5110

HMV £7855.16

Difference = £2745.16

In the same respect my 87p purchase price would be safe down to 80p due to the divi yield. Sounds quite nice and think I may have some more Monday.
#12
avoint
Woolies was stagnent and not open to change. I would like to know why Brokers are forecasting £1.20 as an average whilst you cannot see value?

I suggest you stick to Premium Bonds ;-)


The bottom line is that HMV are trading in a mixture of declining (cd/dvds) and volatile (clothing) markets. If they have a solution and it works then you might be right and you'll make a killing but it's completely misleading to suggest that they're a good investment because their dividend gives you a 9% return on the current share price.

And, if you don't understand accounts (which it seems that you don't) then you're a gambler not an investor. I'd have said that the jfk's thread the other night about how to make a killing betting on football matches is on a par with your investment advice. :roll:
#13
Always seen the end of high street music stores like HMV.

So did Richard Branson, he flogged off his Virgin Megastores and ended up buying Virgin Media.
Gets rid of the old, and buys an ISP, says it all really.

Probably helped HMV when Virgin/Zavvi went under, but with online prices being so ridiculously cheaper its going to die at some point.
It can diversify all it wants, but imho if its core busciness goes, which it is, then its going to go.
banned#15
You've got to ask yourself "why are they seeking investment at such high returns?"....because they are desperate for some working capital to buy new stock :thumbsup:
#16
avoint
Fag packet calculations:

So my bank gives me 2.75% interest at present. HMV is offering around 9% plus any compound share growth. That amounts to say 7.4p today. So by buying HMV I am covered to the downside at circa 80p and upside could go to £1.30+.

In real terms if I invest £5K, and nothing untoward happens, then in the bank I would receive £5137.50 less tax at 20% = £5110 (OK I could wrap this in an ISA too).

If I invest in HMV and they achieve the £1.30 within an ISA (zero tax) and based upon todays closing price I would receive 5000/0.87 = 5747 shares, less dealing charges say 5717 shares. If the above scenario played out then following the dividend my 5717 shares would be worth (5717 X £1.30) + (5717 X £0.074) = £7432.10 + £423.06 = £7855.16

Bank £5110

HMV £7855.16

Difference = £2745.16

In the same respect my 87p purchase price would be safe down to 80p due to the divi yield. Sounds quite nice and think I may have some more Monday.


I can't argue with that arithmetic. The only problems are that the final dividend is only 5.6p, they've presumably already paid an interim of 1.8p and the share price was 67.6p a month ago and only 78.8p on Thursday 25 March.

If yours was the only investment advice around, I think that I would stick to premium bonds.
#17
lumoruk
You've got to ask yourself "why are they seeking investment at such high returns?"....because they are desperate for some working capital to buy new stock :thumbsup:


I doubt it somehow. They've got over £300m tied up in stock. I wonder how much that would fetch in a closing-down sale. :whistling:
banned#18
tony_s1;8218307
The bottom line is that HMV are trading in a mixture of declining (cd/dvds) and volatile (clothing) markets. If they have a solution and it works then you might be right and you'll make a killing but it's completely misleading to suggest that they're a good investment because their dividend gives you a 9% return on the current share price.

And, if you don't understand accounts (which it seems that you don't) then you're a gambler not an investor. I'd have said that the jfk's thread the other night about how to make a killing betting on football matches is on a par with your investment advice. :roll:

totaly agree

OP conveniently forgets to mention that £1000 invested in HMV a year ago would now be worth around £600 :whistling:

http://shares.telegraph.co.uk/charts/?epic=HMV
#19
Two year ago some "banker" recommended buying RBS at £3 as they had fell from £10 (Forgive my inaccurate figures but I cannot be bothered checking the exact details).
#20
Now worth less than 60p.
Glad I didn't buy this "serious tip".
banned#21
Jumpingphil;8743224
Now worth less than 60p.
Glad I didn't buy this "serious tip".

you dont expect the OP to respond do you? :w00t:

I despise all these amateur investors spouting nonsense share tips on websites. I expect some gullible people took the OPs advice but wont expect an apology. :x
#22
tonyd19565
Two year ago some "banker" recommended buying RBS at £3 as they had fell from £10 (Forgive my inaccurate figures but I cannot be bothered checking the exact details).


And if you look on the forums.

Someone reccomended buying RBS shares at 10p when they dropped at the credit crunch.

So, whoever did, are ****ing laughing right now.
#23
Wotwot123
And if you look on the forums.

Someone reccomended buying RBS shares at 10p when they dropped at the credit crunch.

So, whoever did, are ****ing laughing right now.


http://www.hotukdeals.com/item/321605/rbs-shares-bargain-at-15-8p-year-hi?t=321605

Current SP for rbs is 47p.
#24
Anyone who wishes to take a punt should also remember that CGT is on the way up.
#25
WoolyM
Anyone who wishes to take a punt should also remember that CGT is on the way up.


Capital Gearing?
#26
Capital Gains Tax. Been suggestions that it was this that was behind the beheading of David Laws. Tory Telegraph apparently not happy with this particular aspect of the coalition. One theory anyway.
#27


That's brilliant, it's nearly 4x anyone's investment.

RBS shares did go up to around 80p I think, the highest I saw personally was 67p.

RBS will recover, and they will get back to how they where in years to come, which was huge.

If I had cash, I'd buy now.

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