Provident Financial - Woodford, Barnett & Darwall

NotSkint

I took the opportunity to do an overdue rebalance, putting in orders to top slice some better performers to take advantage of the 3.26% drop in Woodfords Equity Income Fund today.
It is probably all in the noise, and is dependant on how quickly the fund sell/buy gets transacted, but should happen tomorrow as Platform usually will do both transactions at once when it is only partial sales.

Ifts

Along with PFG down 66% today, a couple of other Woodfords holdings were down today on funding worries SPHR -81% and HALO -25%

NotSkint

Ifts wrote: »

Along with PFG down 66% today, a couple of other Woodfords holdings were down today on funding worries SPHR -81% and HALO -25%

For the Equity Income Fund SPHR is only 0.01% and HALO is only 0.02% of fund so much less impact.

NotSkint

Woodford has posted a blog entry on his website giving his views about Provident and today's market reaction

talexuser

digannio wrote: »

is he guilty of a lack of judicial diversification?

That's what is said when the fund falls but when it rises he is a great stock picker. An active fund is a punt - otherwise just get trackers. Those of us who fancy an active punt factor the manager into the mix. I'm now 28% up since buying just after launch (think the max has been 34%) , and well remember odd years when he under performed at Perpetual High Income but always came good in the end so not panicking yet. It would take me around a year or or even two before making the decision to drop him after managing some of my money continuously for 25 odd years (for info I finally dropped Mark Barnett's High Income around a year ago).

talexuser

On a broader note haven't commentators been saying a lot of companies do not have the future investment to justify their level of dividends paying today? Maybe this "overreaction" is a function of how the market is in a bubble from new income seekers who will panic at the slightest bump? Does not bode well if a general correction is coming.... you'll need a lot of tinfoil to wrap around your head...

takesyourchances

Personally I have taken the opportunity to top up a little on my Woodford holding, up's and down's is part of it and I'd echo talexuser posts on it.

digannio

Not sure investors know quite what to make of the whole Provident situation. A glance at some of the significant trades in the company late in the day today reveal one sale worth £2.5 million, one buy of £3.9m, another sale of a quarter of a million quid and two buys of a similar amount. Wonder who's got it right!

jimjames

A non investor I know had parked their cash in Provident shares to get the dividends, I'd warned about the risk of a single company share and that diversification was key but they thought it was a very safe company.

Interesting to see the difference. My portfolio is barely affected, FTSE was up, WPCT was down a couple of percent. They are down about 80% from purchase and no dividends now either. A stark warning about the risks of holding one share.

AnotherJoe

Malthusian wrote: »

Monitored the company's structure and realised that there was a certainty that their debt collection rate would plummet, and consequently that they were going to announce losses of £80m to £120m? He'd have to declare that knowledge to the market before acting on it, at which point the shares would have plummeted, and he would have made the same losses as he has anyway.
.

I disagree, that we wouldn't have been inside knowledge, just his opinion. Still problematic to sell huge amounts without affecting the price but it obviously wouldn't have been on the scale as what's happened now.