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Cheers CSDI and all,
Thanks for your advice and input I’m going to stick with TW. for now. So much could change during the next year.
SB - I've little conscience so fags are fine for me. I have plenty of PSN, BWY, BOOT and FORT so houses/land/suppliers are covered. MTO have been kicked out on your advice now. Saves me looking at them more closely. Cheers. (PS - If you haven't got a Sharepad subscription it's well worth it. About 330 quid a year)
"And I've not looked at Mitie, though, now you've raised it, I might take a quick butcher's and get back to you on that?"
.....................................
Moneybox,
I gave Mitie a 30 second slide rule session, and they have negative net assets and are a Vicky Pollard case on the earnings, so they're way out of the ball park for me...
Even if they were a house builder ~ which they ain't.
So no cigar on that one, I'm afraid, though I am impressed you kicked off with both Bellway and Redrow...! :-)
Strictly
"I've run your financial points through a Sharepad filter and It churns out these companies:
If we discount FXPO (high risk right now) and ITV (basket case) we're left with 4 builders, fags and facility management."
...............................
Moneybox,
That you've taken the trouble to give this some consideration to come up with a list is worth responding to...
I couldn't imagine myself investing in fags...
While I'm not a buddhist, I do subscribe to some of their thinking, and "right livelihood" would be part of that which would certainly kibosh investing in cigarette companies for me (though I'm not passing judgment or taking a moral view in respect of anyone else's investment choices here, it's a personal thing for me).
I've never looked at FPXO, so I'll take your word on that, and, as you imply, what sort of road are ITV on..?
And I've not looked at Mitie, though, now you've raised it, I might take a quick butcher's and get back to you on that?
Which leaves the builders.
I'm entirely invested right now across just two companies ~ Bellway & Redrow ~ so nail very much on the head with those...!!
Berkeley I instinctively never trusted and in particular their intended wheeze pre-credit crunch to complete a big shareholder capital return plan and award themselves (by "themselves", I mean the board of directors) a bonus of (I think it was?) around £500 million in all.
That's where King Jeff no doubt got the idea, and it was always bo..ocks from an investor's point of view IMO ~ a huge payout for nothing special and the destruction of shareholder value by paying out far too much in dividend, etc, on a high PBV (the high PBV resulting from the excitement caused by the big divs, but I don't think it's a very popular point to make on this particular share chat).
So that leaves Taylor Wimps...
They and Barratt are not far from being in the frame for me, but are long term lesser performers yet still being more highly priced on a PBV basis makes for quite a gap.
The other company of interest to me ~ one that is in the frame (by that I mean that it's close enough for me to be calculating BVPS for every month end or ex-div date ~ and that typically comes out within 2% of accuracy which is sufficient for me as I look to trade between these companies on a minimum perceived value gap of around 5%) but they are currently indisposed with recent poor performance and a projected lower ROE than Bellway and Redrow.
They do have a tendency for a touch of the Vicky Pollards too, which is a tad disappointing.
To sum up though, I'm now 70 years old, I've honed my game over more than twenty years, and I'm a lazy git when it comes to it.... so I'm now at the point where if it don't need mending don't fix it... twenty two years to the start of this year have returned an average 20% a year, and I passage plan forward at 15%.
Happy to chat further about it if you like..?
Strictly.
Strictly,
I've run your financial points through a Sharepad filter and It churns out these companies:
Ferrexpo
Bellway
Berkeley Group
ITV
Redrow
Taylor Wimpey
Imperial Brands
Mitie
If we discount FXPO (high risk right now) and ITV (basket case) we're left with 4 builders, fags and facility management.
Seeing as you know the builders well, I'll trust what you say about them.
Have you ever cast your eye over IMB and MTO? Would be interested in what you think. Thx.
Many thanks strictly,
Thanks for sharing, I appreciate these are already your guidelines, but I can see the majority of these appear a very sensible set of criteria, that will help you avoid any "wrong turns". I can imagine how number 4 applies to housebuilders, but perhaps not necessarily to other markets. Love the 12th one you added !
"However, any and all information that has a tried and tested formula is of interest to me, and I would be happy to hear your criteria for investing if you are willing to share it."
.....................
OldGuy,
As it's you... :-)
These are my now 12 criteria (started with the eleven right back to 2003, only adding the twelfth, this year, following having overloaded with Inland shares…. This proved an expensive one to have added later rather than sooner... but such is life...)
And they were these…
1) Price to book value less than 1.5.
2) Average return on equity at least 15%.
3) Price earnings ratio less than 10.
4) Good track record for at least 10 years.
5) Organic growth rather than takeovers.
6) Not in a heavily regulated industry.
7) No competition from abroad.
8) Not in a technology industry.
9) Caters for a real, ongoing need.
10) Doesn’t spend much on fixed assets.
11) Easy to follow accounts.
12) Addition made 19/2/22, in the light of experience with Inland shares, I now have a twelfth condition: The share must have enough market liquidity to be able to able to be bought & sold in appropriate volumes
Anyway, hope you find them to be of some use.....
Following these rules pretty closely, I am very happy with the returns I've made over the past two decades ~ this investing in house builder shares malarkey has provided my entire income for many years (apart from, for the past few years, a basic state pension).
Strictly
Hi Nomad
As you know the PSN yield is approx 12.5% today vs 6.8% for TW.
so with 34K shares of TW, at current SP approx 126p, you could generate extra £2.4K divi if the current payouts remained the same, over 12 months.
This does not take into account cost of selling TW and buying PSN with stamp duty which would eat into your possible gain.
The bigger question is, what will happen to your capital from here. Would PSN grow more than TW ?
It's not one I would like to call.
Is it worth, splitting the investment 50/50, hedging your bets, or simply leave alone.
My experience with moving shares tends to be very costly, so maybe patience is the best option.
Also note the next TW divi is for shares held in October, while PSN is not until next March.
So maybe sit on the fence, pick up the next TW divi and then review.
You cannot call this solid advice LOL, but just the mutterings of a serial underperformer.
Hence the moniker CSDI = Crap Share Dealing Ideas
Hopefully others can come up with better ideas, but at the end of the day it is your money and your choice.
I would not act on advice from anyone on here, but would listen if ideas are constructive.
ATB - C
Strictly , I have several investments in Housebuilders going back to the days when PSN shares were around a fiver , albeit I also invest in Energy shares and Banks (sadly).
However, any and all information that has a tried and tested formula is of interest to me, and I would be happy to hear your criteria for investing if you are willing to share it.
I am sure you are right and they will be queuing up to shoot it down , but for every one on here that does, I am sure there will be 10 who agree with at least some of your views (even if they do not express it) and will find it useful to consider what you have used and learnt over the years .
You will know the old adage about bricks n mortar being a safe haven for your cash, and over the longer term I think this is as true for the companies that have a business in "bricks n mortar", as it is for the physical ownership of property (at least up to a point).
Steve,
Okay, my mistake...
Only that you mentioned Aviva and L&G in a response to my comment on Tuesday...
But no worries...
Strictly
Strictly, Why would that be intended for you? You hadn’t even posted on here and nomad was asking about selling TW based purely on dividends.
"The dividend in Aviva and legal and general aren’t as high as persimmon but they are solid payers with great growth prospects over the years to come. "
......................
Steve, in case that was a comment intended for me, as the name implies, I only invest in house builders ~ so I haven't done any research into the two companies you've mentioned....
In 2003, I came up with eleven criteria for investing in shares and they have stood me in good stead throughout (even though I added a twelfth earlier this year in the light of a particular investing experience along with its expensive lesson learned...).
I imagine that if I put them up here then everyone commenting would shoot one or more down in flames, but then how to invest, and what to invest in, is a personal decision for everyone for themselves at the end of the day…
As I’ve implied, I’ve done well over two decades in sticking to my own rules, and other companies, for one reason or another, don’t ever seem to quite cut the mustard.
And although, over the years from time to time, I have been tempted to consider other companies in other sectors, that's always been for like driving up to a house on the market that you're interested in and for which you've read the estate agent's sales pitch...
None of these companies ever seems to warrant my getting out of the car and ringing the doorbell for a further look ~ metaphorically speaking of course...
Investing in sensible house builder shares (because they ain’t all that… sensible, I mean…) is not a get rich quick scheme ~ but it has proved to be like winning the lottery in slow motion.
Strictly
The dividend in Aviva and legal and general aren’t as high as persimmon but they are solid payers with great growth prospects over the years to come.
If TW get back to their special dividends then they will be ok but they are too busy spending profits on buying their company back with buybacks. People think but backs are a positive thing but it only helps the company and not the investor. Aviva made lots of money from sales and gave the money back to the investor.
I sold all my TW shares at £1.76 when the dividend announced after lockdowns was terrible. For all the buy backs and how low they are now I’m pleased I did it.
Since 2009 I have owned 34,000 TW. shares which ended up costing me 39p each.
Recently I started getting my UK pension but find myself struggling a bit with the TW. dividend.
I have been thinking of selling up and buying PSN because as you know the dividend is higher, and the share price has dropped more than TW. Any solid advice would be appreciated.