RE: CSDI strikes again (PSN)30 Jul 2022 00:32
The end of another turbulent month for the SP, after a drop to the low 1700s, it's recovered to close the month at 1884, a wapping 1% better than the end of June.
The headwinds are still there with rampant cost inflation, shortage of tradesmen, and looming increase in interest rates which will make mortgages more expensive, putting some propective new house buyers under more pressure. From a company pov, they seem to be keeping margins intact, although units of completion may be a little lower this year. H2 always seems to have a bigger number of completions as managment push to hit annual targets. The company has no debt so avoids paying high overdraft/lending charges and should be able to generate some new income on earned interest.
According to the HL website, the P/E ratio is a lowly 7.5 and a divdend yield of 12.5% - both highly attractive to value hunters, and dangerously high in the case of the dividend. We cannot expect a 12.5% divi to be maintained long term so something has to give. Mr Market sees trouble based on the 35% drop in SP over the last 12 months, but are we starting the slow climb back up.
For me, this is my only share in an ISA, with a plan to add a little more next month and Sept, to increase my investment from £3K towards £3.5K or £4K if possible. With a current average cost of 2088p, this should drop a few pence with my next purchase. I have a target price in mind of £25 to sell around 1/3 of my shares, and would sell the lot if we get up to £30. Loking back at the charts, we followed a similar route from over £30 to under £20 in 2018, before climbing back to over £30 by early 2020 and then covid hit us - back to below £18 - and another climb to £30 in 12 months, and then back down again to where we are now.
As they say, past performance is no guarantee of future etc, but humans are creatures of habit. I am hoping for a repeat over the next year to take us back up the worry-wall, and in the meantime will wait until next March's divi is in sight. If recession gets bigger, then will just have to sit tight on any drop, and wait longer for recovery. Somehow the UK's housing market stays resilient, with house prices painfully high for the average Joe. Will the goverment bring back more incentives to help Joe Public, which are a big part of the high prices and the company's ability to make profits.
GLA - C
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