HMV

It is a wonder that anyone can see anything positive in the horror story that is HMV. There must have been a time when the company had good things to say, but the combination of weakening consumer demand for CDs and DVDs and the increasing competition from online and supermarket rivals, means that the retailer has had to run hard even to produce the anaemic results of the past couple of years.

That said, the 5.2 per cent dividend yield looks decidedly positive. It is income that could provide sufficient reason not only to hold on to the shares, but to buy quite aggressively. Sadly, the yield is now so high that it sets alarm bells ringing. Would the market really allow shares to trade where they are if the dividend were secure? Dividend cover, at two times, certainly restricts the group’s ability to increase its payout. So even the dividend sends negative vibes. Sell.