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Key Words: ‘Sirens want to charm you with seductive and insistent messages’: Pope Francis warns against the ‘cult of physical wellness’ — and perils of consumerism

financialnews1 on December 6, 2021

While Americans keep up a holiday spending spree that could break records, Pope Francis has a suggestion for your shopping list: less of it.

As the leader of the Roman Catholic Church left Greece on Monday, he invoked ancient Greek poetry to sound the alarm on contemporary consumerism.

Once upon a time, mythological Sirens sang beautiful songs to try alluring sailors to their doom in Homer’s Odyssey.

The story has a sequel now, Pope Francis said.

“‘Today’s sirens want to charm you with seductive and insistent messages that focus on easy gains, the false needs of consumerism, the cult of physical wellness, of entertainment at all costs.’”


— Pope Francis

Pope Francis made his comments, as reported by the Associated Press, in a speech to students. It capped a trip where he also called attention to the plight of migrants trying to cross the Mediterranean Sea from Africa to Europe.

Pope Francis — like so many other spiritual forebears in Catholicism and other religions — has warned against materialistic culture before.

In 2015, Pope Francis said, “Today consumerism determines what is important. Consuming relationships, consuming friendships … Whatever the cost or consequence.”

But there might be a new ring this season, as America’s re-opening economy copes with a supply chain that’s been stretched thin by a labor shortage and voracious consumer demand.

“As the holiday shopping season kicks off, America’s re-opening economy copes with a supply chain that’s been stretched thin by a labor shortage and voracious consumer demand.”

The National Retail Federation projects a record holiday shopping season that could reach between $843 billion and $859 billion.

Online shopping in the five-day span after Thanksgiving was down slightly year-over-year, according to Adobe
ADBE,
+0.59%
data.

But many people got an early start on their gift lists this year, and online sales were up almost 12% year over year.

Consumers’ spending spree might be robust, but so is their charitable streak. Approximately 35 million Americans donated $2.7 billion on Giving Tuesday, making for record-breaking numbers.

“This extraordinary show of generosity lit up the world against a backdrop of a dark two years,” said Asha Curran, co-founder and CEO of GivingTuesday. 

“To avoid the sirens invoked by Pope Francis, consumers might have to take similar measures — turn off their notifications and remove certain shopping apps from their phone.”

In Homer’s epic tale, Odysseus withstood the Siren songs because he was tied to the mast of his ship. Before that, his crew stuffed their ears with wax.

In today’s attention economy, to avoid the sirens invoked by Pope Francis, consumers might have to take similar measures — turn off their notifications and remove certain shopping apps from their phone.

Of course, that’s a difficult way to get through life.

But some financial advisers say people can steer clear of the sirens’ song by looking directly at everything they have — and then being grateful for it.

For example, James Vermillion of Vermillion Private Wealth in Lexington, Ky. said gratitude could people avoid those short-term impulse buys that needlessly gnaw at a person’s finances at the sacrifice of long-term goals.

“By practicing gratitude, we can overcome the urge to spend on possessions that won’t increase our happiness and focus on areas like spending quality time with family and friends,” he noted.

Does Travel Insurance Cover Medical Expenses?

financialnews1 on December 6, 2021

If you have a big trip planned in the U.S. or abroad, chances are you’ve considered travel insurance. However, many find the concept a bit confusing. For example, does travel insurance cover medical expenses? If so, how does it work? Is there a difference between the insurance offered with your travel credit card versus a policy that’s purchased separately?

We’ll break it down for you so you can travel with less worry.

What types of travel insurance are available?

Travel insurance policies vary widely depending on your age, destination, trip length and the type of coverage needed.

Nevertheless, it is critical not to get mixed up between trip cancellation and travel medical insurance as they don’t offer the same benefits and protections. Generally, these two coverage types fall under the “travel insurance” umbrella.

  • Trip cancellation insurance protects you financially if the trip is canceled due to an extraordinary circumstance.

  • Travel medical insurance is a stand-alone policy that protects you financially in the case of illness or injury during your trip by providing reimbursement for emergency medical expenses, including medical evacuations.

Trip cancellation insurance is widely available — some airlines even offer you the option to purchase coverage during booking. Travel medical insurance can be purchased as a stand-alone policy.

What does travel insurance generally cover?

Travel insurance typically covers a range of situations and scenarios related to your financial investment in the trip itself. This can include flight cancellation, lost or delayed luggage, and even theft or damage.

But maybe, more importantly, it may also cover medical expenses abroad. So, for example, if you need emergency medical or dental care while traveling or an emergency evacuation to the nearest hospital or back home, travel insurance can cover the costs.

The types of medical expenses usually covered are:

  • Hospitalization.

  • Outpatient services for medical emergencies.

  • Prescribed medicines.

  • X-rays and laboratory tests.

  • Transportation home if deemed medically necessary.

Expenses usually not covered include:

  • Drug or alcohol-related incidents.

  • Injuries sustained from reckless behavior.

  • Non-emergency procedures.

  • Pregnancy-related expenses.

  • Psychological disorders.

Some plans also won’t cover accidents that happen while participating in adventure activities or expenses connected to pre-existing conditions, so if either of those applies to you, look for a plan that does include them. Also, check to see if your current health insurance covers medical expenses while traveling and, if so, what’s included.

Does travel insurance cover COVID?

Typically, you won’t be covered for medical claims made when traveling to known high-risk regions. This includes locations that involve travel advisories and foreseeable or expected events, like epidemics. But some travel insurance providers have expanded their offerings to include epidemic-related coverage.

Suppose your plan does include this type of coverage. In that case, it will likely provide emergency medical care if you get COVID-19 while traveling, plus trip cancellation and interruption coverage if you or a travel companion gets sick before or during travel.

Just make sure to verify whether your coverage includes disease outbreaks at your intended destinations and what restrictions, if any, are relevant.

The one travel credit card with travel medical insurance

Certain travel credit cards offer travel insurance to cardholders (provided you pay for all travel expenses with that credit card). The actual coverage will vary from card to card. Still, it can include compensation for trip delay, lost luggage, rental car coverage and even travel accident coverage (in the case of death and dismemberment while traveling). However, most cards don’t specifically offer assistance with medical travel expenses or medical coverage, except:

Chase Sapphire Reserve®

Of the different travel credit cards with travel insurance protections, the Chase Sapphire Reserve® may offer the most comprehensive coverage, as it includes medical costs and emergency evacuation while traveling internationally. The card covers both emergency medical and dental expenses up to $2,500 (with a $50 deductible).

What’s more, if your doctor deems it necessary for you to rest and recover for a few days before traveling home, you may be eligible for an additional $75 a day to be used for hotel expenses for up to five days.

How travel insurance claims work

Understanding how travel insurance claims work can be tricky since different providers may use different systems. In most cases, you’ll pay for medical expenses out of pocket, then file a claim afterward. There is usually a window of time you have to file a claim, from either the date of care received or the date of your return. Check the benefits associated with your card for timelines and specific instructions, which can vary.

For example, with the Chase Sapphire Reserve®, you have 90 days from the time you received medical care to contact your card’s benefit administrator. They will ask you to answer some questions, fill out some paperwork and send in receipts within 180 days of the medical care you received. If the care is covered, you’ll be reimbursed for up to the maximum coverage allowance.

What costs should I expect?

Naturally, insurance for travel medical expenses isn’t free, but it’s also not usually prohibitively expensive. Some policies only cost a few dollars a day, while others may cost more for older travelers or more extensive benefits. You can use a site such as SquareMouth to compare the costs from different insurance providers.

Travel medical insurance doesn’t work like most traditional medical insurance, where you visit the doctor, maybe pay a deductible and then the remainder after the claim is filed. Instead, with travel insurance, you typically file a claim after you’ve paid the entire expense out of pocket. Then, if the claim is approved, you’ll be reimbursed. That said, in some emergency circumstances with certain providers, your expenses might be covered upfront.

Be sure to read the terms and conditions of your coverage carefully, so you know what is covered, what is required when paying medical fees, how to file a claim and provide receipts.

Nerdy tip: Pick a plan with 24/7 assistance. If a medical crisis does happen, you can reach out with questions at any time.

Does travel insurance cover medical costs?

And can you claim medical travel expenses you incur abroad? In short, yes — as long you’ve purchased travel medical insurance instead of only trip protection or cancellation insurance. But no matter what type of travel insurance you buy, make sure to read through all the details and keep the company’s support number handy. Then travel with confidence, knowing you’re covered.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2021, including those best for:

Understanding Social Security: Here’s how you can reframe the decision over whether to delay claiming Social Security into ‘reversible’ 6-month choices

financialnews1 on December 6, 2021

Financial advisors often assist their clients with deciding when to file for Social Security benefits, helping them choose between filing prior to their Full Retirement Age (FRA) for a reduced benefit, filing at FRA for the “full” benefit, or delaying benefits after FRA until (at the latest) age 70 to increase the monthly benefit by 8% per year.

Often, advisors encourage their clients to delay their filing to increase their future monthly benefit (since the “‘return” on delaying benefits can be higher than what the client would expect to achieve on their invested assets), unless there are clear reasons (such as health issues) that the client would not expect to live long enough to make delayed filing worth the wait.

But for some people, the decision of when to file for Social Security is not strictly about numbers. Individuals can experience feelings of anxiety and doubt about the decision to delay filing – even if the available information supports the case for delaying – if they fear they will not live long enough to enjoy the higher monthly benefit.

These feelings can be magnified when the decision to file or delay is framed as a one-time choice, increasing the pressure on the individual to make the ‘right’ decision in spite of uncertain information (such as future health and life expectancy) on which to base it.

Consequently, a person might feel compelled to file for Social Security benefits rather than delaying them, even when doing so might increase their risk of outliving their retirement savings.

Fortunately, the Social Security rules allow advisors to reframe the filing decision to make it easier for their clients to decide more confidently whether to file or delay. Because in reality, delaying Social Security benefits isn’t a one-time decision at all: An eligible individual can change their mind and file for benefits at any time. Furthermore, once they have reached FRA, that person can apply for up to six months of retroactive benefits, allowing them to receive a lump sum of accumulated payments while also activating their monthly benefits going forward. Meaning that, if the individual initially decides to delay filing, they effectively have a six-month window to change their mind without giving up any of the benefits they would have received had they chosen to file in the first place.

Therefore, rather than asking clients to make a single, irrevocable decision for the entire three- to four-year period between FRA and age 70, advisors can, instead, reframe the choice as a series of reversible decisions for six months at a time.

If the client changes their mind within that six-month timeframe and wants to file, they can file a retroactive application and claim their benefits as if they had done so at the beginning of the period. Otherwise, they can continue to delay filing for another six months, further repeating the cycle until the client either decides to file or reaches age 70 (at which point they would file anyway, having reached the maximum age for delayed benefit credits).

Not only does this framing provide the client with a more reasonable timeframe to foresee future health issues or other factors that could cause them to change their mind, but because the six-month intervals align with the period in which individuals can apply for retroactive benefits, each six-month decision is entirely reversible.

As with any Social Security filing strategy, it’s important to be aware of the risks and tradeoffs of recommending this strategy to clients – for example, applying for retroactive benefits and receiving a six-month lump sum could result in a temporary spike in taxable income, with potential cascading effects on tax deductions, credits, and Medicare premiums.

Ultimately, however, by nudging clients with the option to consider when to claim benefits through six-month ‘reversible’ decisions, advisors can potentially help them make better choices and to act with confidence!

Jeffrey Levine is the Lead Financial Planning Nerd for Kitces.com, an online resource for financial planning professionals, and also serves as the Chief Planning Officer for Buckingham Wealth Partners. This is an abridged version of his article “Getting Comfortable Delaying Social Security With Six-Month ‘Reversible’ Delays” that can be read here.

More on Social Security

The messy math of Social Security, spousal benefits and when to claim

You can claim spousal Social Security benefits even if you’re divorced — here’s how

Social Security redesigned your statement, here’s why you should take a long, hard look at it

6 Things You Should Know Before Getting the Platinum Card from American Express

financialnews1 on December 6, 2021

The Platinum Card® from American Express is one of the top premium travel cards available. It comes with travel credits, hotel elite status, access to an impressive lounge collection, travel protections and other luxury perks. Terms apply.

What to know before getting The Platinum Card® from American Express

1. AmEx has a “once per lifetime” welcome offer rule

Current and former holders of The Platinum Card® from American Express are ineligible for the welcome offer. This is commonly referred to as AmEx’s “once per lifetime” rule.

Not sure if you’ve had some version of this card before? AmEx will check your welcome offer eligibility when you apply for a card — even before checking your credit. If you aren’t eligible for the welcome offer, AmEx will inform you of this through a small pop-up window. After notification, you have the option to continue with the application or to cancel it.

2. The welcome offer spending requirements

The Platinum Card® from American Express currently is offering a good welcome bonus: Earn 100,000 Membership Rewards® Points after you spend $6,000 on purchases on the Card in your first 6 months of Card Membership. Terms Apply. A $6,000 spending requirement won’t be easy for everyone to meet, so consider when you’ll have a lot of expenses before you open the new card.

Also, mull over what expenses you can charge to the potential card in the next few months. If you come up short of the spending requirement, consider postponing your application to a time when you have more considerable expenses on the horizon — perhaps around the holidays, when you’re finally getting around to that bathroom remodel or before booking your next trip.

3. The annual fee is higher than average

The Platinum Card® from American Express is an excellent choice for people looking for a premium travel card. But it may not be the right card for you. Before committing to a $695 annual fee, look at the card’s benefits and note which perks you value the most. Then compare your list with other cards — which may be more affordable — to see if they might be a better fit. Terms apply.

For example, the Chase Sapphire Reserve® has a lower $550 annual fee and an easy-to-use $300 annual travel credit. Plus, Chase Sapphire Reserve® offers a Priority Pass Select membership and TSA PreCheck or Global Entry credit. However, if you’re also going to pay for a Clear membership, it may be worth paying more for The Platinum Card® from American Express, which will reimburse you $179 each year for Clear. Terms apply.

If you only travel a few times a year, the American Express® Gold Card could be a better fit. This card charges a much lower $250 annual fee, yet it offers an annual up to $120 in Uber credits for U.S. rides and food orders ($10 each month) and an annual up to $120 dining credit. You must add the American Express® Gold Card to your Uber app to receive the Uber Cash benefit. Plus, you’ll earn 4 points per dollar at restaurants and on groceries, and 3 points per dollar on flights. Terms apply.

4. Your credit score

Even if this card seems like it would compliment your travels well, you may not be an ideal fit for this card. American Express generally requires a good to excellent credit score to qualify for The Platinum Card® from American Express. Terms apply.

You’ll want to have at least a 690 credit score before applying for the card. So, you may need to work on building your credit score before applying for the card.

5. Get up to $1,400 a year in statement credits

The Platinum Card® from American Express offers over $1,400 in statement credits each year. You’ll want to maximize these credits to justify paying the $695 annual fee. Terms apply.

Many of the card’s statement credits are based on monthly amounts:

  • Digital entertainment credit: up to $20 per month.

  • Premium Uber credit: up to $15 per month for U.S. rides or Uber Eats orders, with an additional $20 bonus in December.

  • Walmart+ monthly membership credit: $12.95 per month plus taxes.

  • Equinox credit: up to $25 per month.

Terms apply.

Other credits are only valid per calendar year:

  • Clear credit: up to $179 per year.

  • Airline fee credit: up to $200 per year. (Enrollment required.)

  • Hotel credit: up to $200 per year.

  • SoulCycle At-Home Bike Credit: up to $300 per year.

Terms apply.

Cardholders also get a Shop With Saks credit, which is applied semi-annually. You’ll get up to $50 in statement credits for purchases between January and June and up to $50 in statement credits for July through December. Enrollment required. Terms apply.

Nerdy tip: If you open your card account near the end of the year, make sure that you leave yourself enough time to maximize the annual credits and the Shop With Saks credit before the close of the year.

6. You can add different types of authorized users

When you apply for this card, you’ll have the option to add authorized users. You get two choices for adding authorized user cards: An additional Platinum card or an additional Gold card.

AmEx charges $175 to add up to three additional Platinum cards. That may sound steep — especially on top of the card’s $695 annual fee. However, this can be an excellent deal, depending on how the authorized user plans to use their benefits. Terms apply.

Additional Platinum cardmembers get complimentary access to the American Express Global Lounge Collection — including AmEx’s own excellent Centurion Lounges. Plus, additional Platinum card users get Marriott Bonvoy Gold Elite status (enrollment required), Hilton Honors Gold status (enrollment required) and access to the Fine Hotels & Resorts program. Terms apply.

And if you add three cardmembers, you pay under $60 per person for these benefits.

Alternatively, you can add an authorized user at the Gold card level for free. Gold card authorized users don’t get the same lounge access and elite status benefits as authorized Platinum cardholders. However, they can get their own TSA PreCheck or Global Entry credit and can help you earn Membership Rewards. Terms apply.

If you’re considering The Platinum Card® from American Express …

The Platinum Card® from American Express is one of the most well-known premium travel cards around. With more than $1,400 in statement credits each year, lounge benefits, hotel elite status and travel protections, this card offers the complete package for luxury travelers. Terms apply.

Before committing to the $695 annual fee, there are some things you should know. Consider if the card is the right fit for you. Make sure you’re eligible credit score-wise and able to earn the welcome offer. Check the calendar to ensure you can maximize the annual credits or time your application accordingly. Finally, consider if any friends or family members would benefit from being added as an authorized user.

To view rates and fees of The Platinum Card® from American Express, see this page.

To view rates and fees of the American Express® Gold Card, see this page.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2021, including those best for:

1 FTSE 100 stock I would buy and hold

financialnews1 on December 6, 2021

FTSE 100 incumbent Hikma Pharmaceuticals (LSE:HIK) is a stock I would buy for my portfolio and hold for a long time. Here’s why.

FTSE 100 pharma giant

Pharmaceutical companies haven’t always had the best reputation. This has often resulted in negative investor sentiment. The rising costs of life-saving and essential medicines has contributed to this negativity. I believe Hikma is different from a traditional pharma firm. It manufactures generic, branded, and injectable pharmaceuticals and markets them at an affordable price.

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Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

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As I write, shares in Hikma are trading for 2,265p. At this time last year, shares were trading for 10% higher at 2,522p. This is not a concern for me. In fact, I see it as a buying opportunity to pick up shares cheaper than usual. Looking back at the Hikma share price over a longer period, it has risen steadily over the past five years.

For and against

FOR: Hikma’s recent and historic performance is positive. I know past performance is not a guarantee of the future but I use it as a gauge nevertheless. I can see revenue and gross profit have increased year on year for the past four years. Recently, a trading update in November revealed guidance for full-year results is on track for another year of growth. 

AGAINST: Hikma is not the only pharma firm in its space where it attempts to manufacture cheaper alternatives to expensive drugs. This competition could significantly affect market share and performance. This would affect shareholder returns to existing investors and potential investors such as myself.

FOR: The current pandemic, as well as ageing population of the world, could benefit Hikma’s performance. Since the pandemic began, the likelihood of seeing a doctor or getting a hospital bed, especially in the UK, has declined massively. This has led many people to turn to over-the-counter options and with economic pressures weighing on people’s pockets, cheaper options are attractive. No matter the circumstances, medicines will always be required. 

AGAINST: The macroeconomic environment and current pressures could affect performance for Hikma and investor returns. Rising inflation and costs could eat away at margins. In addition to this, the labour market and shortage of workers could also affect operations and in turn performance. These issues are affecting other FTSE 100 picks for my portfolio too.

My verdict

I would add Hikma shares to my portfolio at current levels and hold them for the long term. I believe Hikma has a good market share in its sector to continue to grow in terms of performance and provide me good returns as an investor. It also continues to acquire businesses to enhance its offering.

I must keep an eye on risks that could derail progress but most of these are shorter-term issues, such as the macroeconomic issues I noted. At current levels I believe Hikma is a cheap FTSE 100 stock with a price-to-earnings ratio of 14.

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We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

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Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Is this dirt-cheap FTSE 250 stock an opportunity not to be missed?

financialnews1 on December 6, 2021

FTSE 250 incumbent Balfour Beatty (LSE:BBY) had a 2020 to forget thanks to the pandemic. The stock looks dirt-cheap right now. But its 2021 performance and outlook have picked up. Should I buy shares for my portfolio? Let’s take a look.

Infrastructure giant

Balfour Beatty is a leading international infrastructure group with offices and a presence in the UK, US, and Hong Kong. It employs approximately 26,000 people and has roots stretching back over 110 years.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

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As I write, Balfour shares are trading for 245p, which is a 7% drop compared to a year when shares were trading for 265p. More notably, shares have dropped close to 25% since August, when they were trading for 319p. Current macroeconomic pressures seem to have affected the company’s share price and investor sentiment.

For and against

FOR: During the pandemic and since reopening, demand for construction services has been rising. In fact, the UK government has committed to spending £100bn in the next few years on infrastructure. A firm like Balfour Beatty with its experience and huge construction arm should benefit. This could boost performance, growth, and investor returns.

AGAINST: A major issue is that when there is any economic uncertainty, the construction industry is usually affected. It is also worth noting that the construction industry has usually been seen as a low margin sector. With current headwinds such as rising inflation, costs, and the supply chain crisis, market conditions could affect Balfour Beatty’s performance and any investor returns. Other FTSE 250 stocks I am reviewing for investment could suffer at the hands of the same issues.

FOR: Since reopening, Balfour Beatty has shown good levels of performance and I believe these will continue. It released a half-year update back in August that made for good reading. Underlying profit stood at £60m compared to 2020, when it reported a £14m loss. Net cash had increased and its order book was also very close to 2020 levels, which is pleasing to see. I only see this increasing as demand for construction services grows. An interim dividend of 3p was declared, which is higher than pre-pandemic 2019 levels.

AGAINST: Balfour Beatty is in a saturated market and there is lots of competition for the same business and projects. Despite its size and reach, there are still other firms looking to gain the competitive edge and take contracts from it. This could affect performance and any returns I could receive as a potential investor. Competition is something I consider among all my picks.

FTSE 250 opportunity

At current levels, I believe Balfour Beatty is a good opportunity for my portfolio. I would happily add the cheap shares to my portfolio. It has the necessary reach, balance sheet, experience, and fundamentals to navigate difficult waters and return to pre-pandemic levels of performance and growth.

Analysts believe the stock is trading at a forward price-to-earnings ratio of just 12 based on its growth outlook. This is extremely attractive and undervalued in my opinion. It is worth noting not all investors like the construction industry due to its volatility but I am happy to buy shares right now and I expect returns over the long term.

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While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.


Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Why is the Synthomer (LSE:SYNT) share price down 14% today?

financialnews1 on December 6, 2021

Synthomer (LSE:SYNT) shareholders, like myself, have had a bit of a shock today. The Synthomer share price is down 13.56%, which takes it down about 8.5% over a year. The company has reported no news today. The FTSE 100 and FTSE 250 are in the green, so the Synthomer share price crash cannot be blamed on market weakness. Perhaps it’s the entire basic materials sector, of which Synthomer is a part, that is having a bad day? No, some basic materials stocks are up, some are down, it all looks pretty normal there.

What has caused Synthomer to fall 14% today?

According to Reuters, analysts at Morgan Stanley have downgraded Sythomer shares to ‘underweight’ from ‘overweight’. I do not have access to Morgan Stanley’s note accompanying the downgrade. Various sources are reporting that the bank feels supply chain issues will weigh on the company’s ability to ramp up sales, which will weigh on earnings. A bleaker forecasted outlook also made the bank revise its share price target for Synthomer to 400p, which is below the current share price of 418p.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

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It appears that Morgan Stanley’s analysts have significantly moved the Synthomer stock price. Or, more correctly, investors reacting to today’s analyst downgrade have impacted the share price by selling their shares. Investors are perhaps fearful that Morgan Stanley’s bleaker future will come to pass. They might also be worried about other analysts following suit and issuing their own downgrades on Synthomer stock.

I am not selling my Synthomer shares

I am not rushing to dump Synthomer shares from my Stocks and Shares ISA. There are about 14 brokers covering the stock. Most of the 14 are recommending buying Synthomer. Analysts at Canaccord Genuity reaffirmed their buy rating on Synthomer just a couple of days ago. 

Synthomer is a leading supplier of aqueous polymers. These are bought and used by other companies to make and improve products. As an example, Synthomer’s polymers find their way into latex gloves. Synthomer had a poor 2020, but so did most companies. And things have improved. Synthomer’s trailing 12-month earnings of £217m are currently higher than at any point in the last five years. Its operating margin of 14.5% during the previous 12 months is the best since 2016. All this has happened during challenging times for the global economy. After cutting its dividend during the pandemic, Synthomer has reinstated it. Over the last 12 months, Synthomer has paid 17.3p per share. The trailing dividend yield now is 4.1%. The consensus is that 2022 dividends will be 19.2p, making the forward yield 4.6%. 

Sticking with the consensus

The trouble with reacting to analysts’ reports in isolation is that I would be buying and selling all the time. I would have bought last week and sold today if I behaved like this. Now a series of sell or underweight recommendations and price target cuts will make me think again. But, as of now, this is one analyst note, and the consensus is still overwhelmingly positive.

Perhaps there is something I am missing. Analysts have methods, models, and information sources that are beyond my capabilities. But, the next financial update from the company is not due until next year, when interim numbers are released. For now, that’s what I will be keeping my eye on.

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In 2019, it returned £150million to shareholders through buybacks and dividends.

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  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

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James J. McCombie  owns shares in Synthomer. The Motley Fool UK has recommended Synthomer. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The Victrex share price jumps after FY results! Here’s what I’m doing now

financialnews1 on December 6, 2021

Polymer solutions firm Victrex (LSE:VCT) announced preliminary full-year results this morning. As a consequence, the Victrex share price has jumped in today’s trading so far. Should I buy the shares for my portfolio? Let’s take a look.

The Victrex share price journey

Victrex is a British firm that produces high-performance polymers with a range of real world applications. The polymers designed and manufactured by Victrex are used in smartphones, aeroplanes, cars, medical devices, and oil & gas operations. Victrex’s speciality is the well-known hard wearing polymers known as PEEK. It has advanced technology over the years to become a world leader.

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As I write, the Victrex share price is 2,430p. The share price is up 3% today, from 2,354p at the beginning of trading. This is due to positive full-year results announced this morning. Over the past 12 months, the shares have returned 16%, rising from 2,082p to current levels. The shares are up 3% year-to-date. 

FY results and outlook ahead

Victrex’s preliminary full-year results covered the 12 months ended 30 September 2021. The results made for excellent reading in my opinion. Group sales volume increased by 25% compared to last year which was to be expected due to heightened demand caused by reopening. Revenue and gross profit increased by 15% and 16%, respectively. The good results led to Victrex declaring a dividend of 109.56p per share. This is made up of a regular dividend and special dividend worth 50p. It is worth noting the dividend has surpassed pre-crash levels and gives Victrex a yield of 2.5%.

I can understand why the Victrex share price has jumped today based on such impressive results. The outlook ahead also seems promising. It reported good sales progress in all sectors as well growth plans. For example, progress has been made on one of its new manufacturing facilities in China. Victrex’s growth plans will be supplemented by a robust balance sheet. It can call on some of the £99.9m cash it has available.

Risks and my verdict

Despite the positive results, Victrex does have risks. Firstly, macroeconomic pressures could affect progress, growth, and performance. Rising inflation and costs could hinder margins and performance, especially if it cannot pass these rising costs on to its customer base. This could affect further dividends. Secondly, the pandemic halted progress in the past. New variants, such as the Omicron variant, could lead to a slow down of orders and growth.

Overall, the Victrex share price looks a bit expensive right now with a price-to-earnings ratio of 38. I do like the company and its place in its sector. It has also returned close to pre-pandemic levels of performance as well as paying a dividend that would make me a passive income. I would add shares to my portfolio if there were a better entry point to buy. For now I will keep a keen eye on developments.

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Are you on the lookout for UK growth stocks?

If so, get this FREE no-strings report now.

While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.

And the performance of this company really is stunning.

In 2019, it returned £150million to shareholders through buybacks and dividends.

We believe its financial position is about as solid as anything we’ve seen.

  • Since 2016, annual revenues increased 31%
  • In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259
  • Operating cash flow is up 47%. (Even its operating margins are rising every year!)

Quite simply, we believe it’s a fantastic Foolish growth pick.

What’s more, it deserves your attention today.

So please don’t wait another moment.

Get the full details on this £5 stock now – while your report is free.


Jabran Khan has no position in any shares mentioned. The Motley Fool UK has recommended Victrex. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

: Biden to tout Build Back Better plan’s aim to slash drug prices as Democrats push to pass bill before Christmas

financialnews1 on December 6, 2021

President Joe Biden is scheduled to speak Monday on the parts of his massive social-spending bill that aim to lower drug prices, as top Democrats are pushing to pass the legislation by Christmas.

The Build Back Better plan is designed to lower prescription drug
PJP,
+0.85%
costs by letting Medicare negotiate drug prices, capping how much seniors pay for drugs and also lowering insulin prices. Costs for that widely used drug would be capped at $35 a month.

Senate Majority Leader Chuck Schumer, a New York Democrat, has said he wants to pass the roughly $2 trillion bill before the Christmas holiday — though the measure remains the subject of fierce debate even among Democrats. Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona haven’t committed to passing it, and Democratic aides are reportedly saying passage is more likely in January.

See: Schumer presses for pre-Christmas Build Back Better vote as Biden highlights job-creation plans

And: Biden’s big social-spending bill probably will pass Senate this month without many cuts to it, analysts say

Meanwhile, it is unclear if the drug-pricing proposals will clear Senate rules. Democrats are using a process known as reconciliation — which is reserved for legislation affecting the federal budget — to move the bill, and the insulin cap, among other measures, may fail to qualify, Bloomberg recently reported.

The Build Back Better plan passed the House on Nov. 19. Besides the drug-pricing changes, the package would create universal preschool, extend more-expansive Affordable Care Act subsidies, fund clean-energy programs and provide tax credits for electric vehicles. It would be paid for by a new corporate minimum tax and raising taxes on high-income Americans.

Biden is scheduled to speak at the White House at 2 p.m. Eastern.

Also read: Build Back Better — what’s in it for seniors?

The rise of the 40-year mortgage: what does it mean for house prices?

financialnews1 on December 6, 2021

Image source: Getty Images

With house prices continuing to head upwards, mortgage lenders are getting more creative to attract struggling buyers. One method currently being used is expanding the availability of longer mortgage terms, well beyond the typical 25 years.

So does this new trend offer hope for first-time buyers? Or do longer mortgage terms simply stoke the house price inflation fire? Let’s take a look.

What is happening with house prices?

According to the latest stats from the Office for National Statistics (ONS), average house prices have risen by almost £30,000 over the past year. The average house price now stands at a colossal £270,000.

This means that buying the average house now costs more than eight times the UK’s average salary of £31,285. To further highlight the plight of budding first-time buyers, ONS figures also reveal that house price growth has significantly outpaced the rise in average earnings for the past 20 years.

While the government has a number of schemes available to help first-time buyers get on the property ladder, there is a wide belief that they do little to address current supply issues. Plus, some even feel that house prices would be lower without any Government help at all.

For example, according to estate agents Moving City, the government’s Help to Buy scheme was shown to ‘significantly’ contribute to house price inflation following its launch. 

What’s the deal with 40-year mortgages?

Towards the end of last month, Kensington Mortgages and Rothesay teamed up to start offering a 40-year mortgage. The ‘Flexi Fixed for Term’ mortgage allows borrowers with a 40% deposit to fix at 3.34% for four decades.

While 40-year mortgages have been offered by other providers, including Nationwide and Santander, Kensington’s new offering shines the light on the fact that longer mortgage terms are becoming more popular.

It’s worth knowing that while many providers offer 40-year mortgages, they remain uncommon. That’s because, aside from poorer rates compared to shorter terms, many banks restrict ultra-long lending to younger borrowers. For example, both Nationwide and Santander limit their 40-year products to those aged 35 or under.

How can longer mortgage terms impact house prices?

While some may feel that 40-year mortgage terms can give first-time buyers a much-needed lifeline, others are keen to highlight that these products make houses even more expensive, given the fact that longer mortgages are cleared at a slower rate than typical terms.

As David Hollingsworth, associate director of communications at L&C Mortgages, explains, “Structuring a mortgage over a longer term than the once traditional 25 years will reduce the monthly outgoing and therefore appeals to those that want to build in a bit of breathing space in their monthly budget.

“However, the downside is that the longer repayment period means that you eat into the debt more slowly and end up paying potentially tens of thousands of pounds more versus a shorter term.”

While Hollingsworth admits 40-year terms can help with affordability, he says they shouldn’t necessarily be the first port of call. He explains, “Whilst [40-year terms] can help from an affordability perspective, in the early stages it’s important to keep reviewing that approach.”

It should be noted that one reason behind high house prices is the availability of cheap credit. Therefore, longer mortgage terms may lead to higher house prices. That’s because their introduction increases the number of people able to afford a home. This essentially creates greater competition for the UK’s finite supply of housing stock, pushing up prices. 

In other words, making house prices more affordable, without addressing supply issues, can lead to higher house prices.

Will house prices crash in 2022? If you’re looking to buy a home, see our article that explores whether house prices are likely to crash in the near future.

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About the author

Avatar for Karl Talbot

Karl Talbot

Karl is a writer specialising in investing and personal finance content. He regularly contributes articles on savings, bank accounts, mortgages, and loans. He was previously a Personal Finance Writer for MoneySavingExpert.


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