RE: Thoughts...9 Feb 2024 20:47
Strictly , you clearly have extensive knowledge of the sector and your 20 years following the sector certainly trumps my rather shorter period, although I think I'm a couple of years younger. A 10 year old malt to your 25 perhaps. I am in agreement with you that it is a shame for us all that Redrow and Barratt appear to be merging as it clearly shakes things up and makes it very difficult to make an assessment of what the new monster will look like. On paper, I also agree that Bellway appears to offer better value per money than Vistry. One cannot argue with the ROE for the last 5 years, although it is worth noting that the company has undergone significant changes in the past 10, with Linden/Bovis etc, so there is an argument there that figures are slightly skewed. You are also correct that you would be paying over the odds for Vistry (compared to Bellway) in terms of book value, but I suspect there are a number of things at play here. First is the change in market and the place Vistry are trying to position themselves into. If it goes to plan, it will look like a very different, and presumably less cyclical by business, which carries a premium and the man at the helm has enough savvy to make it work. Thankfully I sold all remaining shares in CRST last year as it is now a bit of a basket case now too. I certainly won't be investing in it any time soon, which is a shame as I have followed Peter for years and have done well with that one. I was wondering your thoughts on Persimmon though. Clearly at face value, their numbers don't appear as good as Bellway. But, they are trading at 10 year lows and it has been a long time since one has been able to buy so cheap, considering the dividend etc. My view is that once we get over the next couple of tough years, the money will begin flowing again and there is potentially significant upside there. Hopefully the Vistry results will be good when they come. Water into wine would be good.