The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Reassuring to see two more largish director buys (from Friday) at these levels- directors must be pretty confident of SMP's future.
http://www.uttoxeteradvertiser.co.uk/St-Modwen-700-home-plan-gets-ahead-Uttoxeter/story-28652939-detail/story.html .Meanwhile back at the farm
http://www.cityam.com/223936/cost-luxury-homes-nine-elms-are-being-slashed-bargain-prices . Most large scale residential developments in London have been financed by selling off plan and certainly the Battersea Power Station site has been pump primed from overseas investors .Concerns have intensified since the Autumn apart from price slashing that financing of this development and attracting new investors might be more difficult in the light of troubles in the East .Especially the worry that foreign and domestic speculators /investors bailing out assigning contracts and therefore new development wil be in direct competition with the resales market of the other developments in Nine Elms As a commercial location it can be argued its a little offf piste for HQ type office developments in but having said that the area has attracted 2 embassies.albeit in a more prominent micro location its a rare opportunity to have such a large site so close to town with great links JLL would have course been aware of all this when valuing the site post planning and hopefully factored all this in but the valuation probbaly occurred before the recent China concerns and the question is could they sell the site for £440m in todays market The market clearly doesnt think so What we of course need is some news that a large investor/ institution has joined the party or a pre-sale of part of the site reducing risks
I agree 9 Elms is having a negative impact on the share price here.. but my understanding was the concerns were mainly around residential units and SMP has a nice mix of commercial and residential development there. But I also agree that this is an over reaction and now bordering on lunacy! I'm not concerned though, as like others have said already, this is a longer term investment and I am sure we will bounce back in due course. Who knows when that will be, but I'm tucking these away for a good few years until the market gives us a sensible valuation.
I agree, this is lunacy. JP Morgan Cazanove issued overweight @530 two days ago. Time to buy? Someone has just snapped up +100,000 shares
Proof that the stock market has become a madhouse now. SMP report terrific profits yet because sales in the locality are sluggish we see the shares dive to even further beneath the NAV. This is happening in many shares now and is a sell off that is being overdone. Hence, time for bargains but personally I do not trust the markets now because rationality has departed. Let's hope it soon returns.
JLL have only recently revalued NCG and net figure post planning is £440m of which I think St Mods share is £220m-so a significant part of ther portfolio I can only think that the retraceis due to adverse sentiment regarding the lack of progress in selling high end apartments in the locality I suspect St Mods are already in discussions with the institutions to bring on board an investor into the project and some large office occupiers
Live price £3.60, that is a whopping 15% discount to NAV per share and an even greater discount to the EPRA NAV figure!!!
Wow this really is a bargain at these levels. A director buy to boot: Rob Hudson, FInance Director, has acquired 8,298 shares in SMP at £3.85.. that is very reassuring.
Its ironic that SMP who have grown on the strength of assembling large sites in the regions will be tested by the success or otherwise of a large Central London site.This will be a long drawn affair and could even appear in the next Housing cycle The scheme is very much in the shadow of the Power Station .A scheme currently suffering from hyped residential values A difficult project which had previously failed to get off the the ground after many unsuccessful attempts by developers over the years having appeared on the front cover of a Pink Floyd album in 1977 The NCG site is a different kettle of fish Its extremely rare that a site of 20 acres so close to the Centre becomes available n the market SMP will no doubt be seeking to bring on board a further partner Exciting once in a lifetime opportunity Meanwhile its a quiet day in Lake Wobegon and business as usual for St Mods. I have every confidence in them and as you say patience required
many thanks sain. most helpful as usual. patience must be the watchword. i watched the one hour presentation during the night(like you im a poor sleeper) & was impressed by the professionalism of the bod especially the finance director who,in answering the questions at the end, could quote every detail of even the smallest developments off the cuff and the reasons for inclusions.i take your point about possible writesdown but these must have already been in the bod's mind when they were being so confident of further earnings growth in the current year.do keep the posts coming.i really value them. LOL
Well headlines that Developers are slashing residential prices and slow sales at Nine Elms might make the recent revaluation of the NCG Market site which forms a sizeable chunk of SMPs value look a bit steamy Apart from that eveything is ok in the shop!
having missed the boat yesterday at 375 i dipped my toe in the water this am at 385 in a generally more stable market and was very surprised to see the reaction near the close to 375.6. as the background was still ok.am i missing something?
Market luke warm since the results.Attention possibly diverted to Countryside launch which might be potentially soaking up any loose change in the market Maybe concerns that a large % of value in SMP is attributable to the revaluation of Nine Elms and fears of residential oversupply which will impact on that. Dont think it has to do with any misgivings of CEO leaving who effectively was a steady hand on the rudder rather than some charismatic driving force shaping the company. I am pleased that they will be actively seeking to take advantage of a buoyant investment market to undertake some dry asset disposals
St. Modwen Properties plc (LON:SMP)‘s stock had its “buy” rating reiterated by stock analysts at Numis Securities Ltd in a report released on Tuesday, Analyst Ratings Net reports. They currently have a GBX 535 ($7.70) target price on the stock. Numis Securities Ltd’s price objective indicates a potential upside of 35.82% from the company’s current price
St. Modwen Properties plc using EPIC/TICKER code LON:SMP had its stock rating noted as ‘Reiterates’ with the recommendation being set at ‘BUY’ today by analysts at Peel Hunt. St. Modwen Properties plc are listed in the Financials sector within UK Main Market. Peel Hunt have set a target price of 515 GBX on its stock. This indicates the analyst now believes there is a potential upside of 28.8% from today’s opening price of 400 GBX
Very, very strong results- impressive. I think some of the great news has been masked by the fact that the CEO is retiring as he will be hard to replace. That being said, the figures are impressive. A 27% surge in NAV takes us to 413.5p and 446p on an EPRA NAV basis. Can't see us trading at a discount for too long as brokers absorb the figures over the next few days. GLA
I meant just over 2 X NAV
SMP confirmed that they will be seeking to disposes of their mature assets -those that they can add no further value at a time wherethe institutional market currently has a strong appetite Should imagine the market would pay a capital sum equivalent to a net yield of sub 4.75% on the M&S at Longbridge for example this will bring in welcome funds for their ambitious devlopment and asset mangaement programmes
The current SP is below NAV .How long does it take to for the brokers to digest that?
Full year results tomorrow, we know they will be good.. but just how good? Should be enough to get us back over £4 and back towards the £4.50-£5 range IMO, considering the NAV is likely to have grown to c. 432p. That would place us on a p/b multiple of just 0.9, or equivalently trading at a discount of c. 9% to the NAV on a p/e ratio close to 4. Again, considering the hidden value locked in the balance sheet here and the fact the NAV is likely to swell to 480p by Oct 2016, we really should be nearer (or indeed above) £5 than £4, and on that very basis I too have felt very comfortable topping up at the levels over the past few days. GLA tomorrow; remember any price movement is likely to take place over the coming days and weeks rather than being fully reflected in the share price tomorrow itself as it will take brokers time to digest the figures and revalue this stock. Patience will pay off here!
Mr Market has presented a buying opportunity that I have been pleased to accept to add to my holding in the confident expectation that when the dust settles on present market turmoil it will look like a sensible purchase. To buy into a dynamic, proven management in a great niche at a p/e of little over 7 at a discount to solid land and business assets is a tasty opportunity. The stock is cum a well covered dividend of 3.14p on April 2nd.
Thank you Sain & Josh. Welcome back. You have certainly proved your worth on this board and I avidly look forward to your contributions. Ihope you will post your thoughts when the results come out on FEB 3. Best wishes
Not gone AWOL just bogged down with work at the moment and have been away over Christmas. No logical reason for the retrace I can see gents; the fundamentals are strong here and at times we have drifted down on low volume and quickly bounced back to c. £4.20. Maybe someone is offloading a steak and has not yet triggered an RNS by going below a reportable boundary as yet. Either way the retrace is of little concern to me as the fundamentals indicate significant value here. I've been buying tranches here at anywhere between £4-£4.15 and see £4 as an absolute bargain. I am sure these will come good over the next few years. Remember this was IC's growth tip of the year last year, at around this price. And the business has improved massively since then, most notably the book value has grown significantly and looks set to continue to grow by c.40% at least over the coming years. Currently trading at a discount to book value of approaching 10%, and with results out Feb and recent management confirmation of profits in line with expectations and another record year I feel very comfortable buying in for the next few years. PE for the full year c. 4x. Some bullish share price targets from brokers here too ranging from £4.60-£5.70. I'd be surprised if we don't see a fiver, or near to that, over the next 6 months at least, ceteris paribus.
402p was too tempting so sold another stalwart Hansteen and recycled in here .Think SP has retraced in a quiet market as probably the only reason Not as bullish as our footballing heros Josh .Starting to miss some of his insightful comments on TEF but he has been bang on the money with Bovis