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Don't watch property sector, so don't know anything about Segro or Londonmetric. Govt offered to pay for Labour, so daft to refuse cos it was impossible to say what affect CV would have - and still is.
I am sure Profits, Margins and Divis will return to previous levels - just don't know how long it will take.
Don't think Govt should interfere with HB's (H2B or this new scheme), cos it will sort itself out. Just costs tax payers money with probably very little affect on number of new builds.
Seems like the property sector is doing a lot better than house builders at the moment. If the HBs are awash with money I can't understand why they needed government assistance and withhold divis. The Property Sector are continuing to pay divis and haven't used the furlough scheme.
Segro have announced today interim divi up to 6.9p interim from 6.3p and a placing for growth.
Londonmetric continuing to pay quarterly divis
In hindsight it looks as if housebuilders shareholders and government have lost out. If profits do get back to normal perhaps they should repay the furlough and look at bonus divis
Just my opinion
If my analysis is right bdev Sp will fall after psn PreInt (04/07/20) so sell maybe half before that, and buy back to value you sold, before bdev PreFin (10/07/20). That way you could have increased your number of shares at no cost. This is not advice and I'm not doing it - just a daft idea.
I am surprised how well HB's are doing, and would get out when Sp stabilises after PreFin, cos should be before the slump.
Thanks Nige. I agree with your analysis. Have moved my house building holding from TW to BDEV this morning. Take on board your warning about the risks out there in all builders.
I have explained why I think bdev the best value but this doesn't mean they will outperform psn or tw.
Another indicator (besides Margin) Cash held by psn and tw decreasing, bdev increasing.
Next results are critical, psn PreInt and bdev PreFin. I expect psn could go down after PreInt while I am hoping bdev improve after PreFin. So I suggest you hold bdev until after PreFin. Not much point in holding for FinRes cos will only reflect what PreFin said, and no Divi.
Of course bad results from psn could cause another Market panic bringing all prices down again.
Cheers for that Nige, I am just wondering whether to buy BDEV tomorrow if they don't go up to much, been in them before and made a profit, hoping to be in and out quickly with maybe a 10% profit.
I sold all but my original holdings in Builders (about 3/4), holding aboy 7.5% in cash, and invested the rest in ggp (mainly, and still got great potential Imho), ncyt, itm and a bunch in nano from ages ago, which could be a good recovery stock.
I think you could be right that 10 to 20% inc in Builders, short term, but Recession, No Deal Brexit, could hit Sp's heavily from about the Autumn.
Reason I'm not investing now is I'm doing better out of little Coys above (particularly ggp), and don't have to risk the timing of the next Builders slump, The depth of the slump is impossible to gauge, not too worried cos the profits on original holding vary from 35% to 106% (av about 60%) and will get out if they look like going into a loss.
Next results will be very interesting to look at - Estimated Dates:
psn PreInt 04/07/20
bdev PreFin 10/07/20
tw IntRes 29/07/20
bwy PreFin 07/08/20
psn IntRes 18/08/20
rdw FinRes 03/09/20
The results above will give us an idea how HB's are coping with CV, but will probably be followed by Recession and/or No Deal Brexit, so even if HB's results good, a slump could follow.
Hi Nige very interesting post that, but can I ask you are you all in cash at the moment, and if so if you think they could increase by 10-20% how come you won't buy anything till next year, when maybe you could make a 10-20% gain short term.
The reason I ask because apart from 1 share that I have i am also all in cash at the moment having made a healthy profit of late, but I feel as though I have missed out a little this last week, I am a bit undecided whether to buy back into a few shares or wait for another downturn, I feel sure their will be one but whether stocks will go down to March levels i don't know.
It got so late last night that I didn't have time to write a summary or anything.
All numbers from LSE shares fundamentals, apart from RelSt from my own graphs.
From the 1st table you can see bdev has more cash than psn and much the highest cash to Mrkt Cap ratio.
From the 2nd table you can see that (besides rdw) bdev has the best asset to debit ratio.
From 3rd table you can see at 30/08/19 bdev up on psn by 122.7 - 83.9 = 38.8%, now 101.2 - 111.8 = -10.6%, or psn Sp has improved against bdev by a massive 49.4% in less than a year.
Incidentally, HB's Sp's down to levels last seen around March 2017.
One could assume psn sorted all quality issues, which bdev never had (but doubtful), and it cost them nothing to achieve. Second part definitely not true cos psn margin decreasing (as is tw) while guess what - bdev margin increasing!
Psn has far more cash than tw, which is why the market thinks psn has more value than tw. There is almost no chance any of the big builders going bust, so I don't think the increase in psn relative strength is justified, so I agree tw better value than psn.
But imho bdev and rdw far better value than psn and tw.
Cash as % age of Mrkt Cap:
Psn 5,103, 843, = 10.4%
tw 5278, 630 = 11.9%
bdev 5594, 958 = 17.1%
rdw 1837, 204 = 11.1%
Psn has about a 30% margin which could explain this (cos rest about 20%). The exception is bdev!
Current Assets as % Current Debts
psn 4069, 996 = 24.5%
tw 4987, 1123 = 22.5%
bdev 6007m 1687 = 28.1%
rdw 2549, 760 = 29.8%
Anything +ve good, -ve bad, but all +ve so good. Rdw top then bdev.
Last chart Relative strength when 04/01/19 = 100. 3 dates Max damage to psn (Quality issues) 30/08/19, Max Pre CV19 14/02/20, Cur RS 05/06/20.
psn 83.9, 93.5, 111.8
tw 89.8, 98.9, 100.2
bdev 122.7, 116.3, 101.2
rdw 99.3, 97.9, 89.6
How bdev Sp can be behind psn by 10.6% in is beyond me, after they were so far ahead of them, and why is rdw so far behind?
Think Builders could do well until Autumn but the recession and possibly No Deal Brexit, so not reinvesting until next year.
But people have become more aware of the importance of crowding and the importance of a good garden, something new builds don't have.
I think TW and all house builders are too high but with a stimulus scheme on the horizon, QE and potential currency devaluation people want to invest in something
TW have been up and down between 180 and 210 all of 2017-2020... with a couple of blips around the brexit vote and the last election. They are in great shape, a cash generating machine and will be a good investment for the future im sure. I sold out half my holdings when they were on the way down (at the 160) mark another 1/4 when they canceled the divi. Wish i had bought back in at the £1.40 mark rather than buying EPIC shares for their dividend now! Hindsight is a wonderful thing...
Still holding some cash so if they drop below the £1.60 mark i'll be buying some more... Long term, they will be back to the £1.80-£2.00 mark without a doubt
IMO TW represent better value than Persimmons and I was very encouraged at TWs trading update. Psychologically people are gonna pick new builds over properties people have lived in and more importantly No Chain to worry about.
PS - I just took a look at IGG and have just bought in. Plenty of volatility to come over the next 12 months so should be bumper year for them!
I also think TW were around 140p back then.... Canm anyone genuinely make a better investment case for them today vs December 2018?
Posting on here and a couple of other boards as I think there is good discussion with reasonable people to be had.
On the 27/12/2018 the FTSE All Share closed at 3591 - 15 pts ahead of today.
Back then you had the threat of a no deal brexit with just 3 months to go but nothing like the numbers in parliment to let it happen as we have today so also there was still the realistic chance of a second referendum.
Back then There were tensions between China and the US.
Fast forward to now and we still have the realistic chance of a no deal brexit - maybe not in name but in terms of damage to the economy we could fail to agree any sort of trade deal and this time there is no chance this time of a pro remain parliament coming to the rescue
We still have a China v US trade stand off
We also have the small matter of a worldwide pandemic which if it hasn't already is going to cause a recession, the size of which may well be bigger than we have seen in a lifetime or best case will still be pretty nasty - the 2008 crisis actually caused relatively little unemployment.
So everyday I wake up expecting a market correction - Maybe not back down to March the 20th levels but certainly somewhere in between.
I sold half my Aviva shares this morning thinking they were due some sort of correction from the last 5 days of increases and put the cash into IGG which gave an absolutely stonking update yesterday. Aviva are up another 6% and IGG down 2.5%....
Ultimately I am happy to see the rise and am getting close to pre Covid levels in my ISA but as I demonstrated this morning, I am getting an itchy trigger finger about this rise being a blip and am keen to not just sit on my hands like I did back in March.
If the FTSE all share is worth 4600 and the FTSE 100 is worth 6500 with Covid 19 what value would it be without!?