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Price broke above left shoulder of a head and shoulders, price formation, which provides a provided measured target of 225. Sector chart is making new bullish high, which supports the bullish scenario . Positive divergence , in the Macd(), indicator confirms that momentum is to the upside . Volume on the breakout was heavier, than the left shoulder pivot, which is positive for future price progress.
Whadda load of Bullocks.
well said slownsteady it’s complete *******s all these chartists fund managers etc etc -90 percent of them fail to beat the market you might as well read tea leaves
Or dandruff if he hadn’t used that head and shoulders?
House prices rose again last month and there are signs that activity in the market is picking up, according to the UK's biggest mortgage lender.
The Halifax said prices rose by 0.5% in November, the second increase in a row.
The average rate on a two-year fixed mortgage has fallen to its lowest level for nearly seven months as lenders compete for custom.
Barclays raises Crest Nicholson to 'overweight' (equal weight) - price target 258 (200) pence
Poor rns today expecting sp to suffer.
It seems to me that they’re just trying to soften the blow when the FY results come out next week. Think the change in net cash will make grim reading. Is the divi safe?
RM et al,
I've just done a quick assessment of Crest 2023 earnings based on the information that is now out there and have marked Crest down to a forecast EPS of 4.5p for the year ~ which hopefully puts me on the right side of things…?
As follows:
£41m “adjusted” profit before tax
Less £11.5m previously notified and £13m notified this morning of one-off costs = forecast net profit before tax of £16.5m
Less Corporation Tax of 25% along with our pal Michael Gove's extra 4% on house builders = 29% = £4.8m tax = net profit after tax of £11.7m.
Divided by 251m shares in issue = 4.5p EPS.
I've just put this out on the blog to invite senior moment spotters to pick me up on any errors, and am doing the same here for any number-crunching, accountancy-minded readers who may be minded to do so here...?
With the negative book value weighting of minus 30% that I have in for Crest against Bellway, and with today's price drop, they still represent best perceived value in my view ~ though I currently have a self-imposed limit of their being not more than 20% of my total holdings.
I'd welcome you or anyone else coming back on this to confirm or correct my numbers...
Strictly
Morning Strictly,
I trust your figures are correct. As you know, I also used to see crest as being best perceived value, due to PBV, but not any more. It’s clear that this isn’t run as well as other house builders, hence the poor shareholder returns.
Take your 4.5p EPS figure, even if they paid all of that out in a divi, the yield would be circa 2%. While I agree the market cap undervalues the assets, I don’t think this is a good investment for shareholders with the current BOD at the wheel, and the SP will most likely go back down when the FY results come out next week.
RM,
Well, if you look at a ten year match for the past decade then, to borrow the old cliché, it’s been very much a game of two halves…
For the past five years, now including my estimate of 4.5p EPS for 2023, Crest’s average ROE was only 3.0%.
Bl..dy hell, even Battersea, aka Vistry, beat that ~ they were on 3.7%.
However, for the five years prior to that, Crest were second best in show, only behind Persimmon, on an average ROE of 23.4%.
Persimmon were on 26.5%, and Bellway were on 21.7%.
So, I guess that we (and I’m saying “we” in case you are still holding Crest shares?) have to take a view that Crest are hopefully likely to recover at least some of their former glory, and that maybe this year is partly about kitchen-sinking the balance sheet and so, in the absence of further problems, no more Vicky Pollarding next year…?
And at a price to book of currently 0.62, we ain’t exactly paying top dollar to hold their shares, are we…?
I mean, I would say that there’s a fair bit of grief already priced into that…?
And I appreciate that I ruffled a few Battersea aficionados’ feathers recently in expressing some doubts about Vistry on the VTY share chat, but it’s worth bearing in mind that, on a PBV metric, Vistry is around two and a half times more expensive than Crest…
Persimmon had been in that territory while under the influence of King Jeff, and I correctly anticipated a greater relative fall in their share price once the smelly stuff was hitting the twirly thing in recent times…
Sadly, however, as you’ll probably know from the blog, just like Syd Barrett, I reached for the secret too soon ~ I mean, I bought in too early.
Hence my poor showing for the year in SWR 2023.
But such is life in this game…
Strictly
Strictly,
I no longer hold any crest shares. The only thing going for it is PBV, but that’s not all it seems when you delve a little deeper.
£585m of liabilities, plus the £552 market cap would give a total cost of £1,137m if you were to acquire the assets outright. Take away the 163.6m of cash on the balance sheet and you could effectively purchase £1108m of inventories for £973.4m, which is only a 12% discount. Now factor in those assets should probably be impaired at least 12% to reflect current market conditions, and there’s no discount on book value.
Hold on tight for tomorrow, it's going to get rough...
RM,
I also sold my remaining Crest shares to buy Redrow about a week ago...
As things stand, that's proved to have been the right move....
The reason being that though the market may look through the gloom to onward and upward, there's also that if I'm anywhere near right about the 4.5p reality check EPS for tomorrow, this is quite a stark difference to the figures the scribblers are talking...
Of course, they too do seem to love that little word to conjure with ~ "adjusted".
So, any big difference tomorrow may come as a market upset ~ along with likely the reduction or even cancelling of the dividend...?
So, whether it's a case of great minds think alike, or small ones seldom differ, we seem to be in agreement.
Which surely means that tomorrow's Crest numbers announcement is now a popcorn moment, rather than potentially requiring incontinence underpants...? :-)
Of course, part of the function of the market is to make fools of us all when it can....
Strictly
RM
The SB Blog...
In case you didn't seen my email yesterday, I wrote to you to advise that I'd accidentally signed you up on the blog at the wrong level ~ and I couldn't undo it retrospectively so instead I cancelled that access and have sent you a new blog invite which you’ve hopefully received..?
As said in my email, I appreciated you challenging me there ~ I reckon I don't get enough of that TBH ~ so hopefully will hear from you again there...?
Given the nature of our discussion, I'm imagining you're following the overall movement of share prices for the house building sector pretty closely right now ~ and particularly with regards to Redrow's share price....? :-)
If you’ve got to read much of the blog, you’ll no doubt understand that wherever Redrow’s share price goes of itself from here is very much a secondary consideration for me…
What is of primary importance is where it goes against Bellway’s price…
And, just two days in admittedly, I ain’t complaining thus far…!
I’m also pleased to have moved completely out of Crest ~ especially having now downgraded its book value weighting against that of Bellway’s to minus 40%
Strictly
Why up today ? Bid coming here next?
Signs of life were seen in the UK housing market in the new year with a rise in the number of mortgages being approved.
Activity remains weak overall, with potential buyers still nervous about high interest rates.
But the latest Bank of England data shows approvals for house purchases rose to 55,200 in January from 51,500 in December.
This was the highest level since October 2022.
Borrowing on credit cards also picked up last month.
People took on £1.9bn more in credit on cards, car finance and other loans in January than they repaid.