Further to last week’s article, ‘Assessing Value’, which looked at an apparently undervalued sector within the UK equity market, this blog considers leading constituents of a domestic growth portfolio – by reference to the same metrics.
Barratt Developments announced a trading update today, following on from reports in the past week from its industry peers Bovis and Persimmon, which has been carefully scrutinised for any indication of how potential buyers are responding to the prospect of Brexit. Following on from the previous blog entitled ‘Property: an Investment or Speculation’, and in response to requests from readers, this article seeks to answer the question of “Where in the sector does best value reside?” (if you’ll excuse the pun). The writer uses a spread sheet to monitor valuation and various inputs to that process which, incidentally, is far from complete but might be of interest to prospective investors.
According to the Markit/CIPS construction purchasing managers’ survey, in the month of June the UK construction industry experienced its weakest performance for seven years. Such forward-looking surveys are helpful in providing an indication of industry trends – with this one showing a reading of 46 (a fall from 51.9 in May), across an index range of 0 to 100 with 50 being the neutral position.
The last week of June 2016 is unlikely to be forgotten by investors in a hurry, as financial markets were ‘wrong footed’ by the result of the UK’s referendum vote on continued membership of the European Union - displaying a level of complacency to match the ‘out of touch’ arrogance of many politicians.
Over the past two years, I had several lengthy discussions with a key official at the Department of Business Innovations & Skills (BIS), whose remit was to prepare for the dematerialisation of shareholdings (ie the abolition of share certificates). Her remit was actually much wider than that and included a number of related matters. One interesting fact which emerged in the course of our discussions – but only after she had done some research – is that there is a set of Parliamentary Regulations that require ISA providers to treat investors rather better than some of them do.
The articles in this blog are provided by a senior member of the UK Shareholders’ Association, the principal body standing up for the rights of private investors over more than 20 years. The association has tackled many issues of concern, including reporting standards, voting rights, pre-emption rights, director accountability, audit practice, excessive pay, waste of shareholder funds in share buy-backs and poor financial education for savers and investors. Web site: www.uksa.org.uk
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