Thursday 1 June 2017

Resourceful? (Portfolio Buy)


Boredom is a great problem for the DIY Income Investor.  2017 has generally been quite tedious, with not much to do with the portfolio but watch the money roll in - apart from the occasional 'sell' when something has increased enough in value.

But come April and the new ISA and SIPP season and there are new choices to be made. And there is always the temptation to 'try something new' rather than add to existing holdings...

My first 'port of call' for new investment is usually to add to something that I already hold - on the basis that I've done a bit of research on it. But - as I said - that gets a bit boring. So then I turn to my 'Toolbox' page (see the link above) and have a look at the FTSE 250 and (even the Small Caps - but that is a separate story). By clicking on the Div Yield column you can rank them in descending order of dividend yield. Then I look for a new name.

In this case I looked at - and discarded:
  • Petrofac looked possible but is embroiled in bribery allegations
  • Centamin has a low forecast yield
  • Redefine International I hold already but is looking a bit shaky - with forecast eps only just covering forecast dividend
  • Carillion I hold already (and am ready to dump if the price recovers - because of the big pension over-hang)
Then I came to Vedanta Resources (LSE:VED): a London-listed diversified global natural resources company (based in India). The group produces aluminium, copper, zinc, lead, silver, iron ore, oil & gas and commercial energy. Vedanta has operations in India, Zambia, Namibia, South Africa, Ireland and Australia.". Key points: nice yield (over 6% forecast), generous dividend cover, and seemingly recovering from a bad year in 2016 plus the merger with Cairn India (oil exploration/production).

I am not overly exposed to the minerals sector, although I hold Anglo Pacific (mainly coal) and BP (oil/gas) - I expect a possible significant upgrading if the world economy takes off again. But there are all sorts of potential problems that could scupper that.

Anyway, I've bought a chunk of Vedanta and I'll wait and see...

[Purchase price: £6.494]

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.


  1. Looks as though it might be a longish wait! I felt a bit smug after a short wait when I bought some for £6.0525, but I seem to be getting my comeuppance today because it is now £5.82. Luckily I have almost learned to suppress the monkey brain enough to think momentarily of the dividend. Everything else seems to be disappearing down the election tube....Good luck!

  2. I'm very wary of commodities in general. I've previously held BHP Billiton (and made a small profit), and BlackRock World Mining Trust (which made several claims which I believed - lost a great deal). It seems to me that the Mining mindset is to say one thing and then do another. At the moment I hold CYN (a minor holding, but the yield is good and the dividend cover even better...)

    After years of monitoring commodity exposure (as a job) I should have learned. Good luck is a pre-requisite for those who invest in miners!