Member Info for Josh95

A good update for a change! Managed to buy some more at £9.15 yesterday too, was a strange drop!

Not gone AWOL just bogged down with work at the moment and have been away over Christmas. No logical reason for the retrace I can see gents; the fundamentals are strong here and at times we have drifted down on low volume and quickly bounced back to c. £4.20. Maybe someone is offloading a steak and has not yet triggered an RNS by going below a reportable boundary as yet. Either way the retrace is of little concern to me as the fundamentals indicate significant value here. I've been buying tranches here at anywhere between £4-£4.15 and see £4 as an absolute bargain. I am sure these will come good over the next few years. Remember this was IC's growth tip of the year last year, at around this price. And the business has improved massively since then, most notably the book value has grown significantly and looks set to continue to grow by c.40% at least over the coming years. Currently trading at a discount to book value of approaching 10%, and with results out Feb and recent management confirmation of profits in line with expectations and another record year I feel very comfortable buying in for the next few years. PE for the full year c. 4x. Some bullish share price targets from brokers here too ranging from £4.60-£5.70. I'd be surprised if we don't see a fiver, or near to that, over the next 6 months at least, ceteris paribus.

Indeed! Trailing Twelve month PE is actually only 3.87!! Having said this the business model does dictate that profits are slightly more lumpy than say a specialist house builder due to the projects and deals SMP undertakes, and so it is best to adjust the PE across a business cycle. Like you say, SMP at the peak of the last cycle traded at over twice NAV. Given that NAV is forecast to grow by a further 40-50% over the coming years that would yield a NAV of c. 650pence, and if we do ever trade on a 2x NAV multiple again that would equate to a share price of £13!!! Not saying we will ever get up to £13, but the potential for this to double is most definitely there; 800p 3-4 years out on a NAV of 650p would only equate to a trading multiple of 1.2, very reasonable!

Another (NED) Director buy! Interesting.. not very large but bodes well none the less. Normal Directors obviously in a closed dealing period right now.. Sain- still think think the market is waiting to see evidence of Ritchie's ability to better manage the business before this can really take off- his poor management is holding it back temporarily. Current forecasted NAV for the period ending Dec 2015 is 725p, so we are currently trading on a multiple of just 1.34 times, well below the sector average but a fairish valuation until Ritchie proves he can deliver improvements in ROCE and margins - hopefully see some evidence at the half year 2016. Planning delays should have ultimately been better managed, all builders have them as we know but some pull in higher margined units from elsewhere. Not impressed with Ritchie, but still like the strategy here and happy to hold tight and collect the 4% yield for the next few years at which point I fully expect the trading discount to sector peers NAV to have been eliminated.

And there is the RNS we have been expecting! York Capital Management Global Advisors, LLC have been heavily offloading the stock and have now taken their holding below the 3% threshold. Hopefully they are done, strange time to sell before the strong reporting period kicks into play Jan.

I'm back in having temporarily exited at c. £4.40 to take up some other opportunities. This looks very good value at these levels and there must now be very limited downside given the fact that analysts at Liberum Capital have forecasted NAV for November just ended to be c. £4.50. At these levels this rates the stock at 4.50-4.12/450 = c. 9% discount to current NAV which looks too cheap and unwarranted IMO. The board have also confirmed another set of record profits will be announced on Feb 3rd. Also interesting to note last year this bottomed out around mid December before rallying very strongly up 30% to Febuary results. Will history repeat itself? Well maybe not to that effect, but Peel Hunt have slapped a £5.15 price target on the stock which from £4.12 represents a potential 25% return from here. I think we will have another run at a fiver next year but I'm tucking these away in my ISA for a good few years yet! Remember this was IC's growth tip of the year last January at £3.94 and is currently trading within less than 5% of that range. Very good buying opportunity IMO. GLA

It was a very strange drop indeed, down c. 6% at one point, with no accompanying RNS or apparent company specific information available that could have caused such a sudden sharp downward share price movement and on a day the sector was only drifting down a percent or so too.. Accordingly, with the very strong fundamentals here as previously outlined, and with no apparent cause (as yet!) behind the sudden drop I felt comfortable increasing my holding further at £5.30 which I funded through sales of other builders I hold that were holding up nicely. Wether or not this was the right short term decision, or if there was anything behind the sudden movement yet to transpire, remains to be seen. But with the strong fundamentals here and very strong pipeline of newsflow about to hit this share between Jan to June I would be very surprised if we don't have a very strong run, or indeed break, £6 by Feb and certainly by Spring. That is not to rule out a little short term volatility of course but I believe we are on an upward trajectory that will take us above £6 in the new year.. Full year results out Jan 28 Annual report Feb 15 Ex Div March Payment April Trading update May Half year results June Action packed six months ahead, which should support a breakout above £6 IMO, ceteris paribus.

Good to see the dividend was reinvested right down at the rock bottom price of £8.72.

I find it strange many brokers only rate Redrow as a hold. By the year ending June 2016 Redrow is likely to have increased its Net Asset Value to 278 pence, and brokers have pencilled in EPS of c. 51p. These financial metrics easily support a share price valuation of £5.75 by June 2016. That would place Redrow on a price to book multiple of 2x, the average multiple for the sector across a business cycle. In addition this would place Redrow on a price earnings multiple of just 575/51 = 11.3 which would not be considered in the least bit stretched. Therefore I place a fair value of £5.75 on Redrow shares for 7 months time. This is a potential 34% gain. I was very impressed by Redrow's recent trading statement and accordingly I have increased my position again here over the past two days. I see no reason for brokers to rate Redrow down as a mere hold, compared with Bovis and Crest which the majority rate as buys. By 2017 Redrow will have increased its NAV per share to 327p. Assuming a trading multiple of 2x, that would yield a realistic price target for June 2017 of 327*2 = £6.54. The EPS for that year is likely to be c. 58p, yielding a pe multiple based on this price target of 654/58 = 11.2 for the year which again is still a conservative trading multiple. By 2018 Redrow will have increased the NAV per share to 380p. Assuming the sector norm 2* NAV a sensible share price target for June 2018 would be 3.80*2 = £7.60. For 2018 Redrows target is a minimum of 62p EPS, and from the LTIP incentive plan we know the BODS are likely to achieve EPS of between 62p and 74p. Brokers have pencilled in 66p, which on our £7.50 price target would put Redrow trading on a very conservative multiple of 760/66 = 11.5x. I think this gives a conservative view into sensible price targets for Redrow. If we achieve £7.60 by June 2018 that will pencil in a capital gain of 77% from today's share price, so in view of the above Redrow looks a terrfific buy at todays prices. On the same basis Bovis Homes could potentially achieve a capital return of above 100% if the BODS get their act together! Using the same analysis Crest Nicholson appears to offer similar value to Redrow but with MUCH higher dividends pencilled in, probably why brokers love crest so much.

Redrow trades on a lower PE ratio than sector peers because it pays a negligible dividend. This is part of its overall strategy though, as monies are instead channeled into growth. Redrow has targeted a minimum of 62p EPS by 2018, and to do with it will need to continue to increase volumes quite substantially. This means further investment in the landbank which is currently only 3.9 years long at current volumes. Significant investment is thus required in the landbank and so low dividends are paid. Whilst the dividend is low, generally the pe multiple will remain low relative to the sector. The big dividend payers have the highest pe multiples, ie tw, psn etc. When redrow ups the dividend I would expect a higher rating on a pe. Although this being said, still looks cheap now as do many builders. strong buy at these levels.

Standard Life Investment have yesterday increased their holding in Crest Nicholson to above 11%! Bodes well, all the builders look excellent value right now but Crest has got to be one of the top picks, infact I'd say its the all round best buy. Huge landbank relative to targeted build volumes, c. 7 years worth at current build rates of c. 5 years worth at targeted volumes. This massive landbank relative to desired size means land investment is not needed, and can simply be replenished as used, allowing Crest to pay significant dividends whilst have excellent growth prospects too. Redrow and Bovis are also good shouts, but Redrow needs to invest significantly in land to achieve its EPS targets, whilst Bovis needs to add to the landbank too and is out of favour with the markets at the moment due to poor management. Crest Nicholson is however a market darling, and given the above I see it as the top pick in the sector which must also be why it is rated so highly amongst brokers and Goldman Sachs conviction buy. It is also Investor Chronicles top pick in the sector.

Director buy of 2k shares should help. Poor management here, but best value in the sector on every metric. Pe for year end now 8.7. Price to book 1.19 times! Sector in freefall, still think it will pick up strongly very soon, certainly by the new year.

RIP Jim Slater, Bovis was one of his last ever buy tips. I wonder what he'd think of Bovis now, although the business strategy here is very strong it needs to be effectively implemented through a strong management team. Ritchie is the weak link and not the man to lead this business forward- he needs to go pronto!

sinking further, live price 64.95p.. put a few dummy buys through and its hard to buy substantial amounts at the moment.

Big sell from Wicksey, glad I'm currently out. Very tempted to hoover up a few at these levels though.

Agreed Dako, the buy case now looks even more compelling at these levels especially when you consider the fact the NAV for December end is likely to be 727p, growing to 820p by year end 2016. This translates into an effective price to book multiple of just 1.2x for the current year, and a PB multiple of a mere 1.1x the period ending 2016. The fact that planning delays have meant more lower margin units drop into the current period, with a corresponding increase of greater margin units in 2016 instead is not of great concern. I think the bigger problem lies with the CEO, his team and their ability to deliver. In the interims the CEO clearly stated that the second half to the financial year would have a much stronger mix of higher margined completions, which he has failed to deliver on. This is not the first time mr ritchie has failed to deliver on his word either, so perhaps the market is begging the question whether Mr Ritchie, the man of broken promises, is indeed the right man to lead this company forward and deliver on the strong strategy. I think perhaps not; I have not been impressed by Mr Ritchies leadership and would urge shareholders to vote against his re-election.

Very poor margin growth has spooked the market this morning. Disappointing from the BODS at Bovis and they have been rightfully punished by the market; they site unexpected planning delays resulting in higher sales from lower margin sites as dampening margins. Although a disappointing result this year, the strategy is in place to rectify this (just a case of whether the bods can deliver it) and I see this as a good buying opportunity at current levels. Higher margin sites should come on sale next year so just a delay really, still poor from the BODS though.

"Similarly, southern-focused house builder Crest Nicholson (LSE: CRST) also appears to be a strong buy at the present time. Its trading update for the full year (released today) shows that high levels of employment and good mortgage access are creating favourable trading conditions, with the company stating that unit completions for the full year are due to rise by around 8% to 2,725. Furthermore, Crest Nicholson remains on target to meet its goal of generating £1bn in revenue by 2016 and £1.4bn of revenue by 2019. And, while interest rate rises may be a cause for concern for the company's investors, its price to earnings growth (PEG) ratio of 0.3 indicates that a very wide margin of safety is on offer. Looking ahead, Crest Nicholson is forecast to become a stunning income stock, with dividends per share set to rise by 43% next year. This puts it on a forward yield of 5.4% and, with dividends still due to represent just 46% of profit in 2016, further dividend rises are very much on the cards"

Huge rise today, well overdue! £10 hit.

Good spot dave, they must have added that date to the financial calendar recently as i have been checking regularly. Could be a very good week for bovis with the update on thursday and 13p dividend payment on friday. Mine is on autoreinvest so id be happy for us to stay below a tenner until theyre re invested! Gla.. Should be well above a tenner soon. Hoping for strong update on thursday for what will be a much more heavily weighted second half to the year this year with more volume and a stronger mix than first half.