Vodafone's 7 Billion-Pound Cash Pile

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This article has been adapted from our sister site across the pond, Fool U.K.

Vodafone (NYSE: VOD  ) announced this week that it had completed the sale of its minority holding in SFR. Following the sale, Vodafone has now banked 7.75 billion euros, or 6.8 billion pounds, in cash, plus a final dividend from SFR of 200 million euros, or 176 million pounds.

In other words, the group now finds itself with an extra 7 billion pounds burning a hole in its pocket.

Banking 7 billion pounds
On April 4, the telecom giant announced that, subject to approval from the relevant competition and regulatory authorities, Vodafone would sell its entire 44% shareholding in French mobile operator SFR to Vivendi, the media conglomerate.

Vodafone and SFR, however, did sign a "Partner Market agreement which will maintain their commercial co-operation." Vodafone will still have some involvement in the French mobile market, albeit at arm's length.

The deal leaves Vodafone with a cash windfall, and when that happens, CEOs tend to get dollar signs dancing in their eyes as they think about what to do with all this lovely loot.

Generally, company boards tend to splash this cash on:

  1. Ill-thought-out merger-and-acquisition activity, often overpaying for rival businesses.
  2. Share buybacks, thus boosting earnings per share by reducing their share bases.
  3. Returning capital to shareholders, often though the issue of "B" shares or loan notes.
  4. Boosting dividends or paying a special dividend.

For me, these options are ranked in order of attractiveness, with (1) being the least.

Show me the money!
I'm wary of CEOs spending shareholders' precious cash on ego-boosting M&A activity. All too often, this destroys shareholder value, as I warned in "The Worst Takeovers of All Time."

Second, there is little evidence that share buybacks make company owners richer, but they certainly benefit directors with fistfuls of share options. Multimillionaire investor Terry Smith is a fierce critic of share buybacks, as I recently made clear in "When Share Buybacks Go Bad."

Third, I've no real objections to having directors return capital to shareholders, such as the more than 1 billion pounds that investors in oil and gas engineer Wood Group (John) recently received after the sale of its well-support division to U.S. behemoth General Electric (NYSE: GE  ) .

Nevertheless, for me, there's nothing better than cash in hand, which is why I prefer higher dividends or a one-off special dividend every time. This leaves me free to decide what to do with my cash, rather than rely on directors to spend it wisely for me!

4 billion pounds on shares
Vodafone -- the U.K.'s third-largest company, with a market value exceeding 82 billion pounds -- has decided to go for option No. 2, through a 4 billion-pound program of share buybacks. Buying back 5% of its own shares isn't the best thing Vodafone's board could do with this new-found cash, but it's not the worst, either.

With Vodafone shares trading on a historic price-to-earnings ratio of 9.6 and paying a dividend yield of 5.6% (covered 1.9 times), Vodafone has a strong case for buying back these "value shares."

Indeed, I'd be happy to join Vodafone's board by buying its shares at their current level of 160 pence.

More from Cliff D'Arcy:

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Source: http://www.fool.com/investing/international/2011/06/18/vodafones-7-billion-pound-cash-pile.aspx

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The Sotheby's Indicator: Getting Closer To Predicting A Crash


Great intuitive chart here – lifted from the chart compendium put together by Damian Cleusix of Global Tactical Asset  Allocation (see here for complete deck):

chart

According to the notes – a signal is given when:

1) The RSI reaches an overbought level (bottom pane – been there and now heading south)

2) The MACD closes below the Green signal line (middle pane – almost there)

3) The monthly close of the stock price is below its 12 month moving average (almost there – it’ll have to rally just under 10% from here to make it back above the MA by the end of June)

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Sprint Gets Trouble From T-Mobile

In a recent move to stem subscriber losses and defend itself against competitors, T-Mobile launched an offering that will give business customers a credit of $200 to switch over to T-Mobile from other carriers like Sprint, AT&T and Verizon. Interestingly, this move comes after Sprint announced its own plans to give credit to switching customers sometime back.

Source: http://blogs.forbes.com/greatspeculations/2011/06/17/sprint-gets-trouble-from-t-mobile/

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Cool Websites and Tools [June 18th]


Check out some of the latest MakeUseOf discoveries. Most of the listed websites are FREE or come with a decent free account option. If you want to have similar cool website round-ups delivered to your daily email, subscribe here.

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Otomata – The Internet has numerous interesting music generation tools to offer. Many of these tools offer complicated interfaces that require familiarization before good music can be made. But Otomata is an exception. It’s a free to use musical sounds generation web app. Read more: Otomata: Generate Cool Music Tones & Share

 

Eat With Me – Eating together is one of the easiest ways to break the ice and get to know somebody. Eat With Me is a web tool that lets you create events centered around quality meals. Simply create an event, fill in the details of where and when, and describe what kind of meal it will be (vegetarian, kosher, etc). Read more: Eat With Me: Connect With People Over Meals

 

 

Book Buzzes – If you are always eager to read a new book from that favorite author of yours, Book Buzzes is a tool you will love. When you sign up for a free account and specify your favorite authors, the tool will send you an email any time that author releases a new book. You can further customize your alerts by choosing your location. Read more: Book Buzzes: Receive Alerts For New Book Releases

 

 

htaccess Tester – htaccess or hypertext access is the default name of a directory level configuration file for Apache servers. These files are used to specify security restrictions for a specific directory so a greater control can be implied. If you want to test your htaccess rules but don?t want to go through an elaborate effort, htaccess Tester provides a quick alternative. Read more: htaccess Tester: Test htaccess Rules Online

 

 

BBC Brief History Of Timezones – The Internet has been made a knowledgeable place thanks to numerous developers and companies creating educational tools. Adding to this list of informative apps is “A Brief History of Time-Zones” by the BBC, a collection of different tools that educate the visitor about time and timezones. An interactive globe lets you view time in different parts of the world. Read more: BBC A Brief History Of Timezones: An Informative Site About Time & Timezones

 

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These are just half of the websites that we discovered in the last couple of days. If you want us to send you daily round-ups of all cool websites we come across, leave your email here. Or follow us via RSS feed.

 

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Applying For A Student Credit Card? Here Are 3 Ways You Can Get Approved

If you’re a college student, you know how expensive books, movies and tuition can be. And if you only work during the summer break, you may be looking for a way to stretch your funds through the cold winter months. Helping you through this is a student credit card. Find one with low interest and [...]

Source: http://www.legaldebthelponline.com/2011/06/18/applying-for-a-student-credit-card-here-are-3-ways-you-can-get-approved/

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The True Cost of Being a Soccer Mom: Time = Money

Hockey mom driving so to practiceWhen your child makes the team, you're thrilled. You write the check, you buy the equipment -- and then the true cost kicks in: time. As your children get older and the sports become more competitive, the time commitment you and your entire family will make goes up. Often, way up. So what's the true time cost of being an all-out "soccer mom" -- or any other sports parent, for that matter.

Here are some rough calculations quantifying the overall time commitment for having your kids involved with specific sports on an annual basis based on real-life experiences. We've also calculated the value of that time, using the median hourly rate for all occupations -- $16.27 -- according to the Bureau of Labor Statistics and assuming the child participates in the sport for 10 years (ages 8-17). The numbers are estimates and parents of athletes participating in the same activities at different ages and levels may spend far more or less time. It's also not to be implied that the median wage is what the parents in this piece do or would make.

To be clear, we're not talking about the extremes -- what it takes to raise an Olympian or a professional athlete. We're considering the level of involvement in sports that makes you good enough to make the high school team and maybe play a club sport in college. For anything beyond that, the numbers get drastically higher. And if you're a coach or assistant coach, you know firsthand to round these numbers up.

Hockey

Drake, 10, has been chasing and stopping hockey pucks since he was about 5 . He hit the rink a young age, and has been playing goalie since age 7, much to the delight of his high-energy parents Greg and Elyzabeth Voell, who own their own business. The closest rink to their home is about 30 minutes away door-to-door without traffic. Drake is now playing on a AAA level travel team, which practices at a rink even further away.

Drake's general team practice routine calls for three 2-hour sessions per week. Drake also has private training with his goalie coach early mornings before school once a week, then again mid-week on synthetic ice at his coach's facility. Games are held each weekend in nearby states, but the team often travels to tournaments across the country and in Canada. Each season, the time commitment becomes more demanding as the travel increases. "We have become a through-and-through hockey family," says Drake's mom.

Estimated annual time commitment: 1,000 hours
Estimated value of total time: $162,700

Gymnastics

Lance, 11 and the middle child of three, can do back flips like you've never seen. He has been doing gymnastics since third grade. His parents, athletes themselves, support their son's commitment to the sport -- and what a commitment it is. Lance hits the gym for nine hours a week -- recently scaled back from 12 hours -- year-round. The gym is approximately 30 minutes from their home and competitions tend to involve overnights. His mother, Marta Czarnecki, generally watches the practices or runs errands, among them bringing her other two kids to their respective practices. The Czarneckis are realistic about what their investment in their son's sport may yield, noting that fewer than ten guys make the Olympic gymnastic team every four years. Moreover, fewer than 20 colleges maintain men's gymnastic teams, and even fewer provide scholarships. His coach also warns a lot of boys drop out when they hit puberty and bodies and interests change. In the meantime, his mom says, "We figure that gymnastics is keeping him healthy and active and building his confidence."

Estimated annual time commitment: 820 hours
Estimated value of total time: $133,414

Soccer

My nephew Zach, 11, is fast on his feet and like many American children, his first foray into team sports was soccer. He's now on a "travel' team, and they call it that for a reason.

Zach is the eldest of four boys in an always-on-the-go family. His mother Michelle Howard's calendar looks like an air traffic control dashboard. All of the boys participate in one or two sports per season. Zach's soccer schedule in both the spring and fall involves two practices per week, with two games on weekends. As is often the case, he competes in the town's recreational league as well as on a more elite "travel" team. His parents don't want him to have to choose between soccer and lacrosse, so he plays both. It's a scheduling double-whammy.

Michelle runs a tight, but loving, ship, and stays in constant touch with her husband regarding logistics. "I was calling him a lot and we started to get our wires crossed," she admits. "The shared calendar on my iPad is command central. Now, no one makes a move or commits to anything without checking that first." Zach's grandparents live nearby and also pitch in when they can. Their take: "They say 'it takes a village' for a reason."

Estimated annual time commitment: 320 hours
Estimated value of total time: $52,064

Ballet/Dance

Annabel, 11, started dancing when she was 7 with ballet class once a week. With each new level and year, another day of classes is added -- each class is 1.5 hours. She just finished her pre-pointe year -- three ballet classes a week totaling five hours and an hour of modern dance class. Auditions for the annual Nutcracker are in August, rehearsals start in September and add about two hours to her regular schedule until November. Then it picks up until showtime. During peak rehearsal season, she puts in about ten hours a week.

Her mother, Suzanne Webster, typically picks Annabel up from school. Annabel has a snack and changes for ballet in the car, and gets some homework done at the studio if she has time. "She really amazes me," says Suzanne. "She knows how to plan ahead on homework and figures out what needs to get done right away and what can wait a bit according to her ballet schedule."

It does take a toll though and Suzanne admits she's -- understandably -- a bit relieved her two other children are not so deeply involved in activities. "I always thought the time commitment was insane until I talked to moms of swimmers," she added.

Estimated annual time commitment: 490 hours
Estimated value of total time: $79,723

Football

Jaxon, 11, has been playing football for several years. His family recently relocated to an up-and-coming rural area that doesn't yet have its own league, so he plays in a more populated nearby town, a full 40 minutes from home. Jaxon is one of three children. His mother Jennifer is a photographer who juggles photo shoots and parenting 24/7. Jaxon's team practices for two hours five times we week from late summer through November. Games are every Saturday, and there are pregame duties as well. Jennifer says it's worthwhile to keep him involved with team sports, but knows the time commitment will probably increase in the coming years, "We see the high school boys practicing almost all summer."

Estimated annual time commitment: 420
Estimated total value of time: $68,334


Baseball

My son Sam, 11, religiously follows the Yankees and is begging to play "travel" baseball in addition to being in the county's recreational leagues. Experienced baseball moms tell me to brace myself for "double headers." I'm also reminded of a warning from a friend with a young adult child who spent his fair share of time in the bleachers: "Never let your kids play a sport without a clock." Baseball timing can be tricky -- you never know just how many pitches will be thrown in any given inning, and then there are extra innings, rain delays, etc. Sam currently practices two times a week for 90 minutes. His weekly games are run about 2 and half hours. On the plus side, baseball fields are usually relatively close by. In our case, most games are only about 15 minutes away. Some fields have concession stands, which have become our default dinner short-cut.

Estimated annual time commitment: 260 hours
Estimated value of total time: $42,302.

Horseback Riding

Cortney, 13, is an accomplished rider. This fall, she and her horse will attend an elite private school, where, in her words, "You get to ride for PE." Her mother, Holly Cunningham, is ringside for ongoing riding lessons and daylong horse shows.

Horseback riding isn't just a sport, it's a lifestyle. Caring for the animals alone can be a tremendous time commitment. It's not unusual for Holly and Cortney to be up at 6 a.m. cleaning stalls before school at the stable owned by Cortney's grandparents where the horses board. They're lucky: It's just down the street, which takes a lot of driving out of the equation. But the Cunninghams estimate it takes two hours of barn work and feeding a day for four horses (45 minutes a day for Cortney's horse alone) and an extra 1.5 hours five days a week for exercising the horse and lessons.

Estimated annual time commitment: 750
Estimated value of total time: $122,025

More Time Cost Factors to Consider

Individual sports tend to be year-round: Some seasons never end, hence the high numbers above for individual endeavors. Time off can cause performance set-backs. Lance's parents shared that his gymnastic coach tells them if he takes one week off, it takes him two weeks to get back in shape.

Assume they'll make the playoffs: If your child plays a team sport, you can't assume your schedule will open up when the regular season ends. Play it safe when you're planning and assume they'll make the playoffs, which can extend the season by weeks. Plus, missing practices during playoff season really doesn't go over well with coaches.

Your "summer break" will be broken: Practices for fall high school team sports frequently begin the first week in August. So, summer break as you've traditionally known it with younger children gets abruptly cut almost in half.

Longer-term dividends: Playing team sports could, ultimately, make you a more resilient employee better able to handle constructive criticism, thanks to years of feedback from coaches (i.e.: being yelled at from the sidelines). The time management involved with individual sports may also pay dividends. Long-time media executive and cable pioneer Lou Borrelli, who swam competitively for 15 years and coached for five, summed it up this way, "It's a great sport that forces you to major in time management and multitasking, which will serve you well when it's time to hang up the Speedo."

Consider it priceless: As with many things involving children, I think you have to chalk up the time spent on affording your children the opportunity to participate in sports as invaluable. Some of my favorite times with my own kids happen in the car in between games and on the way to the ski mountain. It's where memories are made and teachable moments happen. Priceless.


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Source: http://www.dailyfinance.com/2011/06/18/the-true-cost-of-being-a-soccer-mom-time-money/

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Is Smart Personal Financial Management Supposed to Be Entirely About Frugality?

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When magazines and TV shows get on a subject, there's no getting them off it. Shouldn't pieces done in these media on personal budgeting give it a rest telling people to lay off the Starbucks lattes every morning because it makes no financial sense today to lay out five dollars every day for this luxury? While lattes are undoubtedly the favorite whipping boy with all gurus in personal financial management, there are other well-frequented expenses that they like to bring in for variety too from time to time - vacations, shopping for groceries without coupons, eating out, cable TV, smartphone...

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GBP/USD Outlook ? June 20-24


The pound fell against the dollar  for a third week in a row. The upcoming week will provide the all important meeting minutes among other events. Here is an outlook for the British events, and an updated technical analysis for GBP/USD. British inflation remained high in May (in the headline CPI number), but this probably isn’t

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