Neil Woodford Sells Vodafone Group

LONDON -- Last week, City super-investor Neil Woodford sold his holdings of Vodafone from the Invesco Perpetual High Income fund that he manages.

The move comes after a turbulent few months for the telecommunications shares, having spent November and December wavering between 154 pence and 163 pence, but regaining some of their lost value throughout January and into February, settling at around 174 pence in recent days.

Mitchell Fraser-Jones, a director of Invesco Perpetual, commented:

In terms of trading activity, the fund has now completed the sale of its holding in Vodafone.

The company has reduced its forecasts for revenue growth on the back of ongoing weakness in its core southern European markets and the cash flow cover of the dividend has fallen to what we view as uncomfortably low levels.

The company announced a share buy-back rather than the hoped for special dividend with its dividend from Verizon Wireless, while we also have reservations about the company's ability to maintain its margin on data revenues.

Woodford's move out of Vodafone is in contrast to many City analysts, who believe that the company's latest set of results were encouraging, despite the continued tough economic climate globally.

Famously, Woodford sold out of banks prior to the credit crisis, and -- similar to Warren Buffett -- resisted joining the dot-com bandwagon, avoiding the losses that crippled those unfortunate enough to have bought into the bubble at its peak. He's beaten the FTSE 100 by 200%-plus during the 15 years to October 2012 by identifying large-cap winners on a regular basis -- so is his "cashing out" call the right one regarding Vodafone?

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