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Vlad,
Having re-read what you wrote and my response to it, I felt it might be worth some further comment....
In the hypothetical example you've given, if the reality check figure of the equivalent of 10% of share price or more is being made, providing you're happy with that, then I would have said that any additional evaporation rate would be pretty irrelevant...?
That's no really come up for consideration in that way for me I would say...
And if house builders as an average over the long term sell at 1.5 x book, the 10% would equate to 15% ROE and that's a pretty good ball park long term average for the sensible house builders in the sector.
For a company selling below book, it then wouldn't even need to make a 10% ROE to meet your target.
But the difference is that I'm a one trick pony, only investing in house builders and, regardless of how profitability goes, house builder share prices have always been seriously cyclical.
And if the share price is well out of whack with current profitability, that's going to impact on the shareholder return percentage that for you seems to be your preferred indicator.
And if house builder shares are suffering or doing well as compared to other sectors, it could be that your indicator is moving up and down between the house building sector and other sectors, so implying that house builder shares are relatively a good buy or not such a good buy.
So, for me, this is an unnecessary distraction... My time spent on investments is pretty much full on trying to evaluate one house builder share against another, and I then frequently trade between them, always as a seeker of perceived best value.
I start with the book value, and the share price then comes into it as a component for PBV or P/E, but for the example I gave in my previous comment, the return on equity of the one company is four times as high as the other....
As a fellow aficionado of long term compounding, I don't need to even say to you how awesome that difference is over a number of years, and I think that working off book value not price is more appropriately accurate.... I'm trying to avoid saying that working off of the price is more of a blunt instrument as, to be fair, it does give a reasonable indicator...
It's probably a fairly subtle point, overall, and so also probably worth giving further consideration to.
Elsewhere than here, I'd be happy to go into further detail on how I'm trying to better evaluate the different house builder shares, and put that to you to throw metaphorical bricks at.... I've had some interesting discussions on the blog about some of the finer detail of this, particularly with people who've come onto the blog from this LSE share chat who've been following their own investing path but in a similar direction to me and so trying to compare notes to hone all this further....
Strictly
Vlad,
Although you seem to be on by far the most similar investing song sheet to me of anyone I've come across (other than people from within my own investing circle) I would say that there are a few differences...
I suppose the more discussion we have they more we'll understand those differences...?
One thing is that you're measuring off of market cap rather than net assets. I can see that that gives you an immediate measure of real return on capital.
However, if you consider two companies, shares for both priced at 100p and P/E of 10, but one company has underlying assets of 50p and the other has assets of 200p... those are very different beasts, aren't they, and this may be a very poor use of metaphor, but price is like a newspaper, good for the day but destined to be tomorrow's chip wrapper, while assets are real and are much more enduring and slow changing.
To directly respond to your question though, and allow that I'm only looking at about half a dozen companies in depth, and I keep on anally looking at those same half dozen companies all the time to the exclusion of everything else (because that's what has worked for me and my investing crew for two decades) barring a couple of weeks recently skimming stuff in the Telegraph online as part of the dialogue we've been having there, I've already got chapter & verse on the naughty boys of the sector, like Galliford, when it comes to any gap between mythology and reality check.
But, for a quick skim, your question doesn't even have to come into account for me.
Take Next, for example. Using The Share Centre's numbers, tangible BVPS went from 201.66p to 307.51p in four years to 2020, an increase of 105.85, plus they declared 583.5p in dividends in the period, so that's 689.35p real return, which is 172.3p a year which is 2.4% return based on price which is how you calculate it I think except I'm working off a single share because, as I've previously said, I think that simplifies things.
So, if I'd not discovered the house building sector and instead spent the investing part on my week endlessly skimming for new opportunities, Next would have lost me there already.
If I'd gone to the next stage, to find that even with that p.ss poor return, the company was typically selling at between 20 and 25 x book value, I'd probably have had to take a break for a quick lie down.
I can see I'm already running out of available characters to carry on here.... if you've scrolled back through my posts, you'll have no doubt noted that I and others have a private blog dedicated to the fine art of investing in house builders.
I have no doubt that you could bring something useful to that, and maybe get something back in return... if it interests you, then perhaps put up an email address, albeit a temporary one as others have done, just to make contact and then we could take it from there and also carry on a further conversation on all this.
Strictly
One question Strictly - as mentioned, I like to assess surplus - i.e. average annual growth in tangible shareholder funds, i.e tangible balance sheet equity, i.e. net tangible assets, i.e. tangible book value over the past 3 or 4 years expressed as a percentage of current market cap, and added to the current and/or historic annual yield - the sum of these two gives the surplus generated,
Now suppose I found a great business that was very attractively priced, giving a surplus over 10%, which is what I am looking for, but, say around 10% of earnings did not reach the balance sheet on average over recent years, how would you see that?
I ask, because, with such a large surplus, the loss of earnings on route to the balance sheet is never going to be huge. Accounting complexities mean that not all earnings hit the balance sheet. Some business will not declare profits that don't reach the balance sheet, they will write down profits with the required cost provisions until earnings and tangible equity growth match, which is the ideal. Clearly a discrepancy of any size between earnings and tangible equity growth is a major concern, but if the tangible equity growth is sound and high relative to market cap, albeit slightly down on earnings, this is not necessarily a problem is it?
"I think that Vistry/Bovis has traumatised you. Years of watching the relatively weak performance has taken a toll on you. Have you considered Bovis watchers stress counselling for Bovis trauma!"
...........................
Vlad, that is very perceptive of you....
I did undergo a lengthy period of therapy for post traumatic stress disorder in 2015 after clearing out some Bovis shares (which I'm almost embarrassed to own up to and which I'd bought in 2013), just after my folly of also having invested part of my capital into supermarket shares...
Talk about being tempted onto the rocks by sirens...
The treatment did the job, though, and I've been a firm advocate of counselling ever since....
Especially since I've kept pretty accurate numbers on investment performance ever since and what that folly might have otherwise cost me screams out at me from the first page of my spreadsheet every time I look at that particular section.
And providence clearly did smile upon me at the time, as I came out back then at an average price above today's, and actually made a profit, believe it or not....!
2014 was the year I started using book value weightings, though, which I feel has upped my game since, and, once I'd had that insight, even though I hadn't at that point fully thought through that process and refined it to how I use it now, Bovis's days as part of my portfolio were numbered...!
Hopefully, barring a ridiculously big relative fall in price, which I don't easily imagine occurring, as there seems to be enough investors being fooled by the same old same old bullsh.t, I'm now firmly an ex Bovis smoker.
Now THAT might be wacky baccy...?
Strictly
Strictly - see below:
'Basically after the Covid falls, when it came to buying back in March, I mostly exited in Feb, Bellway and Redrow stood out in quality terms and the likes of Vistry were perhaps slightly cheaper on some metrics, but clearly for good reason, so I stuck with Bellway mainly and also Redrow'.
As stated above I am not advocating a buy case for Vistry, I don't hold Vistry, I hold Bellway and Redrow - and LGEN of course.
I think that Vistry/Bovis has traumatised you. Years of watching the realatively weak performance has taken a toll on you. Have you considered Bovis watchers stress counselling for Bovis trauma!
"Now you have advised me of this platform I should probably check out the other relevant share chats!"
Bindog,
Probably also worth scrolling back through the past comments of individual commenters who seem to have something worthwhile to say.... here, and on TEF chat, for the past....
While you do get a lot of day trader chat on these pages (much more so on chat pages for such as TW. rather than here, but even so, there are several apparent tradesmen contributing regularly there so what they have to say is worthwhile as a view from the sharp end), which may be of limited use and mostly includes zero numerical analysis which, I suspect, is what is now interesting you?, I would say that here is a very different platform to Telegraph online...
Even the articles written by the columnists on the Telegraph ~ who presumably are supposed to know what they are talking about ~ are quite a surprise to me... I had hardly read any of those until very recently, when I started opening them up for a quick look in order to pursue a conversation with Vlad seeing as he's the first person contributing there who seems very much on the same song sheet as me... there are several here on LSE with whom I have kept up a steady ongoing communication elsewhere via email and a private blog, but maybe only one of whom is, I would say, on the same song sheet as me to the extent that Vlad seems to be...
Mind you, I'm interested to see what Vlad's own number crunching on Bovis turns up for him now he's had a nudge..!
Re the investing articles in the Telegraph online, IMO they are so badly researched, and so plain wrong, that I'm surprised the Telegraph allow them to even be published...?
After all, encouraging people ~ many of whom, I suspect, don't have much idea about what they're doing ~ where to specifically invest their money is a big responsibility, I mean, it's a bit more serious than the racing tips on radio 4's Today programme...
Of the articles in the Telegraph I've clicked on to, most of them I've barely skimmed unless comments below them have aroused my curiosity enough to look again, and maybe even do a brief bit of legwork on the numbers.
But, 100%, I mean, without exception, every company I looked at there I reckoned to be a long term investing nightmare... I don't mean that the share price necessarily wouldn't go up in the short term - it might do, but that's not the basis on which I invest.
So mostly I haven't commented there about them.... too tempting to become too disparaging.... but it has served a purpose of sorts - which is, yet again, it reaffirms why I ONLY invest in house builder shares.
On the basis of: "If it don't need mending, don't fix it..!"
And hence the moniker...!
Strictly
Strictly,
To answer your question on my holdings, I have significant variety with 16 stocks and mainly in small caps.
In the housebuilding sector I have 9% in VTY and 5% in FORT.
Had hoped to do a bit of adjustment today but was too busy at work!
Now you have advised me of this platform I should probably check out the other relevant share chats!
When and if I get my paws on my pension, I plan to conduct significantly more detailed analysis of potential stocks. I value the knowledge I am picking up from you and Vlad as I hope it will serve me well in the future. That said, I plan to use your methods to assess my larger cap holdings over Christmas.
"Bovis will still likely beat the market and may do okay relative to the HB sector in the sense that the relative weakness is in the price. "
.................................
Vlad, that's part of my point though.... there is no weakness in the price, quite the opposite.... especially as I mistakenly gave Bellway's PBV earlier, not Bovis's....
As of close of play tonight. Bovis's tangible PBV, by my reckoning, is 1.29 against Bellway's now 1.12.
Providing you agree my maths, I'm imagining you'd agree my statement above...?
If I sit in the driving seat of the car called Bovis, all I can see in the rear view mirror is a trail of carnage behind me....
Right now, I can't see through the windscreen.... the scribblers are trying to assure me that it's a nice straight road ahead with no hazards...
Maybe they're right, but I have other cars on other roads to choose from, and for which the rear view mirrors tells me all was well before.
So, why take the chance..?
In Warren Buffet's world of baseball metaphors, he has:
“The stock market is a no-called-strike game. You don’t have to swing at everything – you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘swing, you bum!'”
or
“What’s nice about investing is you don’t have to swing at pitches. You can watch pitches come in one inch above or one inch below your navel and you don’t have to swing. No umpire is going to call you out. You can wait for the pitch you want.”
Strictly
Strictly - Vistry, I was interested back then, there was a view held by IC around that time that after the recent takeover margins and ROCE might improve. But since the Spring I have felt that this was probably a premature assumption. I still think that as the sector recovers, Bovis will still likely beat the market and may do okay relative to the HB sector in the sense that the relative weakness is in the price. Countryside Properties was also a business that I held but backed away - mainly because they calculate ROCE based in tangible assets only, ignoring the intangibles on their balance sheet from the recent acquisition, for which they paid real tangible money. This obviously sent their ROCE into the 30s and was all over their report, when pressed they told me that ROCE is non-statutory in its method, which is correct and that others often use their method of ROCE calculation, which is not correct.
Basically after the Covid falls, when it came to buying back in March, I mostly exited in Feb, Bellway and Redrow stood out in quality terms and the likes of Vistry were perhaps slightly cheaper on some metrics, but clearly for good reason, so I stuck with Bellway mainly and also Redrow.
Not sure if any interest but 2 of the best performing IT’s In my SIPP have Bellway at no 1 & 2 in their holdings
Mercantile
Henderson Smaller Companies
Expect these to get a big bounce if a deal actually gets agreed. Henderson is back at a near 9% discount to NAV which will definitely close when the announcement comes.
Strictly and Vlad thanks for the insights of investing and specifically the info on housing sector. Hoping to make better decisions moving forward or at least avoid pitfalls.
"MR Clyde is from a management culture where getting in the first strike in a meeting is seen as an objective"
.............................
Vlad,
A bit like Don Quixote then... tilting at windmills....?
I'm anticipating a comment back from you at some point in response to my Bovis numbers.... I scrolled back a few comments for you, and it seems you rated them back in May...
Maybe you still do...?
That could be a discussion to be had...
Strictly
Strictly - MR Clyde is from a management culture where getting in the first strike in a meeting is seen as an objective - I have referenced this on the DT before. Unlike many people that I have worked with in the past where wild accusation and point scoring where frequently the entire objective of the whole meeting, if you press MR Clyde after his initial brash response, he quickly settles down and becomes quite constructive. His comments, although sometimes outlandish, have a measure of substance and he is quite a good practical economist and often comments on the economic articles. So despite the initial response abrasion, I do quite enjoy RM Clyde's input, he certainly moves along the discussion and often triggers input from others.
Vlad,
If you allow that Crest have had a couple of duff years through having got London more wrong than our more favoured house builders, and so take a longer view over the past eight years from 2013 to 2020, then these are the key numbers in comparison to Bovis as seen through the eyes of a single share:
Bovis average ROE 5.6%, PBV 1.10
Crest average ROE 17.3%, PBV 0.89.
On that basis, if Bovis share price dropped by more than half on Monday to 400p, and Crest's stayed the same, Bovis STILL wouldn't make into my buy zone...
That's how overpriced I reckon they are...
Of course, not everyone bothers like small things such as an estimated loss per share this year of 185p, after adjusting for intangibles, so I'm not imagining any relative excitement on their share price any time soon.
The market has been putting up with this right from the get go... if you take the 22 years of declared results for Bellway and Bovis from 1998 to 2019, which is as far back as I go for Bovis, then Bellway's average ROE for that period was 17.4% compared to Bovis's 11.9%.
I'm sure you are a fellow compounding aficionado...?
Just think about that gap of 5.5% running for 22 years and how that has widened the relative outcomes....
And now, hard to believe, but Bovis have got even worse!!!
What I don't get is: how do these companies keep on getting away with it..?
Strictly
Vlad,
Getting a bit tetchy on Telegraph online investing comments today, wasn't it...?
I really didn't understand why Mr Clyde seems to have some sort of bee in his bonnet...?
Some sort of denial, perhaps..?
I don't think I'll bother responding to him again unless he comes up with something rather more constructive, even though it was tempting to ask him to give us an indication of his long term investing record...
In the end, that's always the "Show us your w.lly" question, isn't it, and, funnily enough, I find that most can't, or won't, give me an answer on it.
Not that I have any interest in seeing their member, you understand, I'm just being metaphorical.... :-)
Strictly
"An interesting trend I was told about is that house builders invariably do well in Q1 of the year and so I will be targeting a re-evaluation by me around Easter. Have you noticed this trend?"
Bindog,
However you cut that one, it's trying to predict short term price movements - and I absolutely don't go there, though I might occasionally position myself to some extent for trading figures coming out, but it still has to be based on perceived best value at the time.
You haven't mentioned your overall holdings....?
Earlier this year, I met a couple out walking the South Hams coast path, as you do, and they both happened to be in the investment game in different ways.... one was a chartered financial analyst, which sounds pretty serious, but they both metaphorically took a step back made the sign of the cross at me, like I was a vampire, when I told them I had the grand sum of three holdings at the time, that that was a pretty good spread by my standards, and that they were all in the same sector.
They couldn't argue with my long term results though.... we've kept in touch, and I think the one who's the financial analyst was starting to get it.
My point is, in my usual long winded way of getting there, that you can listen to what orthodoxy says about spread, or you could listen to what Warren Buffett has to say about it, which is rather different....
I mean, you can choose to go wide, or you can choose to go deep, and try to keep opening further layers of the same onion.
That's what I've been trying to do for the past two decades and, so far, it's working for me.
If you decide to go deep, fire up the excel and analyse the numbers over a long period of time to within an inch of their life....
Bit by bit, you're likely to get there...
And maybe read "The Zulu Principle" which, basically, is urging readers to do just that...
Do feel free to come back at me on this, though, and I imagine Vlad might also wade into this when he sees an opening...?
Strictly
Strictly - yes I am here. Like Vistry, Crest is selling cheaply but the weaker margins and ROCE do not give these businesses the kind of quality protection that Bellway and Redrow enjoy. Also the build up in equity as a proportion of current market cap appears lower for Crest in recent years, which affects the net surplus quite a bit relative to the big two in quality/value terms.
Also Inland, decent business I agree, but they do fall over themselves to reclassify their assets to current values using the method that ST of the IC is always yacking on about - is it NRPA NAV, something like that. Essentially if you can rent any of the plot out it is no longer classified as a land holding for house building but as a investment rental property, so if you are so minded you can reclassify. ST of IC thought this oh so clever, I never liked it. I have not kept up of late but Inland were art this a lot a few years ago.
Vlad
Thank you for your insight.
I got caught pants down in March and VTY suffered like most of my other stocks. It had done pretty well for me over the last few years but I was very much a hands off investor.
A period of furlough in the spring enabled me to look deeper but I just added more VTY as I was familiar with it. I hadn't really looked to see the best of the sector and I have benefitted by the rising tide lifting all boats.
Your logic seems sound to me and BWY is favoured by several tipsters and so I will probably add and shift into it.
An interesting trend I was told about is that house builders invariably do well in Q1 of the year and so I will be targeting a re-evaluation by me around Easter. Have you noticed this trend?
Bindog,
Since buying into the house builder sector in 2003, I've only moved out to cash once - which was this year in the face of oncoming covid, in the spring.
I didn't sell up fully, but now fully back in and, as of Friday's close of play, I'm up 8.3% on the year rather than down 28.8% as is the case for Bellway.
What I do do is trade frequently between different house builder shares, always pursuing best perceived value... sometimes I'll take a 5% gap, sometimes even less if I want to balance up holdings and see half a chance to do so.
My aim is to beat Bellway by an average of 10% a year... by coincidence, this was also Buffett's annual target for beating the S&P in his early days, which he exceeded... no chance now, of course, his fund is way too big.
I've kept pretty accurate records for this since the start of 2013 and, up to the start of 2020, I was around 6% a year ahead of Bellway, so not reaching my target.
Being fortunate enough to have spotted the oncoming iceberg this year ~ and I'm not expecting to ever be able to do that again ~ has catapulted my relative performance forward, and I'm now beating Bellway by 12% a year over the past eight years, but I would anticipate that average slipping back over future years but hopefully not below 10%.
I have a weighting system against book value per share to make it simple to see the perceived value gaps (don't ignore the word "perceived" as it's important!) and, right now, the three big boys that are on my radar, Bellway, Redrow and Crest, are all within 3% of each other in terms of my assessed value.
Beating them, by some margin right now, is Inland Homes - but they are a relative tiddler, and so come with relative liquidity issues unless you're only investing a few bob....
Nothing I have looked into comes close to house builder shares for me - I have eleven criteria to meet and everything else easily gets F for fail, such as the two non-house builders Vlad put up, though he also seems to watch the ball, not Ronaldo's legs.
I tend to invest mainly looking into the rear view mirror... if the management's rubbish, it's likely to show in due course.
I have no view on short or medium term prices - what matters to me is the perceived value gap between different house builders, they're nearly always too cheap compared to cash IMO.
This is now the pee on your bonfire section...
If you scroll back through my past comments here far enough ~ click on my name ~ you'll no doubt see I've been uncomplimentary about Bovis, or Vistry as they are known as these days - in our circle they are referred to as Battersea Dogs Home.
They're likely to finish the year on about 655p BVPS net of intangibles, that would give them an average ROE for the past ten years of 5.6% compared to Bellway's 15.8%
Yet their PBV is way above Bellway's, at 1.32 vs Bellway 1.10.
Vlad, are you reading this?
Strictly
Strictly,
I have followed your suggestion and followed the two of you onto this forum.
It interests me that you stay in the housebuilding sector and perhaps have done so for 20 years.
Do you tend to trade in and out or do you just trust the fundamentals and hold for the duration?
If you did your UK stock screening today would you find BWY to be way ahead of any other stocks?
You both have very high conviction in this stock and have invested heavily. You mention a long period of stability and consistency of policy. Do you see any risk of a change in management direction of philosophy negatively impacting the company?
I have a fundamental belief in the sector due to ongoing demand and the fact it is the easiest sector for the government to influence. I'm currently holding VTY and FORT but will probably follow into BWY as well in the current dip.
From where we are today what would be your estimate of the potential upside to the SP?
Many thanks.
Very surprised that nobody has mentioned the "cladding" word. Suspect that is why they are building cash.
John,
The 50p div is about a third of earnings, in line with their 37 year record...
So, for Bellway, I would say that that was a Ronseal job...
Strictly
to add..
i did wonder why if you have 253m in cash plus undrawn facilities of £495m why would you take outa further £130m in bonds?? Its cheap money at 2.7% but just seems a bit unnecessary.
The trading update looked solid but i guess wider market sell off was for the fall. Wish I'd dived in some more this morning at £26.5.
They seem to be building a cash buffer at £250m so i guess the £0.5 dps is conservative but i think the emphasis on buying building plots is a better use of capital long term...especially if any forced sellers. Definitely not making anymore land. I agree on the Buffett philosophy with dividends - If it doesn't get paid out ultimately is should be reflected in a higher share price.
Redrow seemed to take more of hit today and now trading at 1.07 to book and Bellway 1.14
Jake,
I started managing my own investments in 2000, however, I hadn't had my "epiphany" about house builder shares at the outset ~ I mean, realising what superior long term value they were against anything else available (that I'd looked at, anyway) to the likes of humble private investors like you and me ~ until 2003.
But, if I had understood what Bellway (or Ghost Dog, as it is affectionately known as in our investing circle, and is also our benchmark share...) was about and had just put my money into their shares and had also reinvested the dividends, every £1,000 would now be worth over £20,000.
Whereas, while I've done better than that from an initial slow start, I've had to really work at it, and make many, many trades between house builders shares instead of having been able to just sit there, scratching my bum, and watching progress unfold.
The thing is, it was there to see right from the start that Bellway only had to carry on doing for the next twenty years what they'd been successfully been doing for the previous twenty years.
Only, it took me several years to "get" it.
I appreciate that there have been plenty of shares in other sectors that have done as well or more so.... but it would have taken a better man than me, Gunga Din, then or now, to be able to see their potential.
And that old b.st.rd, Captain Hindsight, is never around when you need him, is he...?
So, I don't have a view about what the management at Bellway may or may not feel about the likes of us, I'm just happy that they seem to be carrying on as before...
Might be worth having a play with the numbers on a spreadsheet to see whether you concur with my comments about dividends... it's taken some drumming home within my own investing circle that minimal dividends being paid is a good thing not a bad thing providing the company concerned can do something useful with the retained earnings...
And don't know if you're a reader of Warren Buffett...?
Might also be worth seeing what he has to say about dividends..?
But I don't cease to be surprised about the degree to which over-paying (IMO) dividends seems to pull in the approval of investors.
Strictly
Vladamir
In the early 2000's, I undertook an analysis of all of the FTSE100.... back then the P/E for the index was around 15 or so, implying a return on investment of around 7.
However, this was based on "mythical" earnings rather than "reality check" earnings.
I found that reality check earnings just about covered dividends, so that was the actual return on investment.
And that implied the the FTSE100 was going nowhere.
And I rest my case on the fact that, in more than two decades, it ain't....
Gone anywhere, I mean...!
And that single, but profound, insight back then has saved me an absolute bl..dy fortune in preventing me from investing in all manner of big company cr.p.
I came to see that the FTSE100, with apologies to Kipling, is "A set of numbers presented by knaves to set a trap for fools".
The further insight from this was to not pay too much attention to overall company equity (and this is where it becomes relevant to your question) but to just look at the progress in value of a single share, adjusted for dividends paid.
Firstly I must bring in a caveat here that a rights issue would be a spanner in the works.... but that's it, and anyway, a rights issue, whereby a company is issuing shares at well below book because they're in the p..p, is surely a flashing red light of itself, a la Barratt andTaylor Wimps after the credit crunch..?
And I don't think one needs to over-complicate things (and here I may be opening up a discussion point as, by contrast, I may be over-simplifying things as I don't claim to be the fountain of all knowledge in this), I mean, where exactly any "evaporation" occurs doesn't really matter IMO.
If a company is buying it's own shares back at above book value, a la Next (big time in their case, they've pi..ed away 90% of retained earnings that way but the market doesn't seem to care..?), or if a company has had to top up their pension plan, that all comes under the category of c.ck up in my view, and all goes in the pot.... or down the plug hole..?
Don't know if you have the essential numbers for Bellway going right back....? You can start at 1983, follow the book value per share each year and line that up against declared EPS adjusted for dividends paid and it's pretty much an exact match...
How many companies could you say that about..?
So, the most important numbers for me for any company are the book value per share each year (net of intangibles, of course) and the dividends paid.
That's it... if those were the only two numbers available to me, I'd still be pretty happy to make my investment plans on those providing I can go back far enough through a couple of economic cycles, because then that would likely show up poorly managed borrowings which would be the other thing to be concerned about.
Essentially, it is as simple as that as a basis.
Let me know what you think, though..?
Strictly