re big deal30 Oct 2018 09:09
Would be nice to think one or two of the institutions beginning to recognise the fact that despite the cavalier attitudes of house builders BoD's towards their shareholders the business dynamics are considerable easier than many other investment opportunities. The Budget yesterday must have removed some sources of angst peddled by the fake news manipulators of the sector namely help to buy and SD providing clarity wrt the timing of the scheme's winding down and the perennial issue of sandbank "manipulation" by the big builders. For the next few years at least the sector looks set to remain in the sweet spot thereby relieving Boards of having to think of anything "clever" to improve margins and or cash flow. Prejudices put aside and holding of noses should be ok for a year or two for II's, the inevitable Brexit turbulence from time to time notwithstanding. For reasons difficult to fathom the sector has been put through the ringer over the last four months or so often on questionably low volumes of activity. Yes house prices have softened but the impact on earnings and cash generation, a few outliers excepted has been fairly muted to non existent and well within companies abilities to absorb without threatening cash returns to shareholders. "Fortune ventures the brave" the saying goes be good to see a bit of transaction volume come back into the sector and take price activity away from the prop desk bot manipulators.