Member Info for Josh95

Agreed Dako, Crest now easily the best value house builder on P/E and forward EPS growth and combined EPS + dividend yield metrics. Now far behind the masses: RDW; TW; BWY; GFRD all trading on similar ex dividend 3 year forward average PE metrics on my spreadsheets suggesting CRST at an average 20% discount to peers on this basis making it a strong buy in comparison. Furthermore, CRST now lagging on price to book multiples too despite having superior ROCE compared to peers. Currently trades 1.65* OCT 2017 projected book value compared to BWY and RDW at 1.8 times for their forecast year end positions and most others (TW etc over 2*). Unjustifiably cheap IMO and hence I bought back a large chunk at 510p the other day.

Sold a load here at over 600p, very tempted to buy back at these levels which have put CRST straight back into best value territory in the sector in terms of earnings. Luke warm update keeping a lid on share price recently.

Yes not the best price to sell at, but maybe he needs the funds or has another opportunity which he believes can outperform this or perhaps simply wishes to diversify? This is why I never invest in just one share. In terms of gearing at the full year the gearing was c. 50% which although high compared to conventional housebuilders is still relatively modest and is covered well by earnings and backed strongly by assets so is not really of great concern, although I wouldn't like to see it go too much higher. Small companies like this need debt to finance grow otherwise they would be tapping the market for equity further equity issues which is not optimal in terms of maximizing total shareholder return. That being said the higher gearing ratio will be contributing to the relatively higher volatility we have seen here but is still not a concern at this point IMO.

Strong update, sale of land and simultaneous commencement of construction contracts is good for cashflow and lowers risk. Clearly a seller (probably Mark Dixon) keeping a lid on the price however- that's the problem with these illiquid AIM stocks. Gives us all an opportunity to top up however whilst this continues to trade below NAV, just add, sit and wait.. one to tuck away. Yield approaching 3% too and below NAV = no brainer.

Current forecasts for 2017 financial years: PSN 2.4x TW 2.1x BKG 2.1x Bdev 1.91x (intangibles of 89p stripped out) CRST 1.88x GFRD 1.87x RDW 1.69x BWY 1.65x TEF 1.58x MCS 1.3x BVS 1.18x INL 1.08x

I agree, a real coup for Bovis after the significant damage done to the business by that absolute disgrace of a CEO David Ritchie. He should be utterly ashamed and embarrassed at the damage he did to Bovis homes. Reputationally Ritchie took Bovis from one of the best regarded builders in the sector and turned it into an absolute dog with what is now a pathetic 2* HBF customer rating- the worst in the sector. The warning signs were on the door for the last two years though with his inability to manage the build processes and business strategy clear in his weak trading updates. This begs the question as to how strong the overall board was though and why he was not challenged effectively by the Chairman (and put up for re-election by the nominations committee) who should ensure a strong and competent BOD's. There is no doubt about Greg Fitzgeralds abilities, and with Bovis homes valued on the lowest premium to net assets in the sector due to having the weakest ROCE in the sector there is no doubt it has amongst the greatest upside potential if sector stability continues. The big question is though, will Greg Fitzgerald have the time to reset Bovis's strategy and return it to former glory and upper quartile performance this business cycle? From a risk reward perspective it does look like a compelling buy again now wiith a good yield on offer whilst the strategy and business is re-set. If the business cycle does turn (which looks unlikely at the moment for the next few years) then one could argue this also has the lowest downside risk given its small premium to net assets compared to sector peers, with amongst the highest upside too if the party continues. With that in mind I have purchased a few again here after selling out a long time ago. I still think there is value elsewhere too though- Telford Homes still looks good value both on net assets and earnings multiples. Inland Homes also trades at an even lower premium to net assets than Bovis (although not a traditional housebuilder). Bellway, Redrow and Crest also look amongst the best value in terms of earnings if the party continues.

Well, here we are Bazz- we have made it to 600p, or c. 621p when factoring in the recently paid dividend! Trading update 2 weeks away could hopefully provide further upward momentum, for now the sector party looks set to continue..

Redrow flying after being upgraded to "overweight" by JP Morgan: http://www.digitallook.com/news/broker-recommendations/jp-morgan-upgrades-countryside-redrow-as-it-reviews-uk-housebuilders--2610942.html

Nothing to write home about really, profits were always going to be lumpy here and INL did warn they would be more heavily weighted towards the second half last year.. the latest planning successes will have already added to the EPRA NAV which is now forecast to hit 100p by FY. I still see this as a great buy at 60p or below. Net assets have risen to 118mn in Dec so the business is trading at just 125/118 = 1.06x historical Net assets which is a very undemanding and will surely limit any significant downside risk.. but with considerable upside potential (as demonstrated by EPRA figures) the risk reward trade off seems heavily skewed to the latter here.

http://www.bbc.co.uk/news/business-39415786

http://www.bbc.co.uk/news/business-39415786

No probs Bazz. Good rise today, factoring in our 18.5p dividend we will receive in early April we are now at the equivalent c. 580p.. not too far off our 600p short term target and last spring's highs!! AGM tomorrow, hopefully that could give us a slight push nearer..

Haha.. Yes 2227 I remember our comparison very well! Very interesting to look back on- we got it spot on with RDW. And as for Gleeson, well.. that is now nearly double the price of TEF and was the pick of the bunch by far! All bar SMP outperformed TEF significantly (mainly due to issues around its 9 elms development) and the basket of those 3 certainly outperformed TEF. That being said, TEF looks relatively good value now at nearly half the price of Gleeson, but RDW looks similarly good value too so I can't see TEF closing the gap!

Interesting take on the update! http://www.proactiveinvestors.co.uk/companies/news/175208/analyst-thinks-redrow-s-unscheduled-update-could-be-peacock-fanning-its-tail-after-bovis-bid-rejected-175208.html

Strong update today by RDW- £306mn Profit before tax is well ahead of current broker consensus and RDW have outlined this at the minimum that will be achieved for the year ending June 17. Bodes well, and RDW has a tendency to under promise and over deliver.

Very limited upside from here imo, in terms of a bid price. Reason being is that a hefty premium to net assets is only ever paid for a strong management team or other intangibles. This has neither, and so its value is only the value of its landbank with a margin of c. 25% built in. Not many other builders likely to be interested at all as the land market is currently very bouyant so no large premium here. Gfrd merger looks most likely imo as geographically thenfit makes sense. All summed up nicely here: https://www.ft.com/content/4344af62-07fd-11e7-ac5a-903b21361b43

I agree with you in part RIch- look what happened to Woodrow's and Wimpey's back in 2008, the merger nearly destroyed the combined entity, Taylor Wimpey, outright right at the end of the cycle! Ans a similar story for Bdev! Could that happen here? I agree no one knows the length of this cycle, especially given article 50 and EU wide elections are imminent, certainly some risks on the horizon. But then again, that being said, this time around no one has large debts which were what nearly bankrupted Bdev and Tw. at the turn of the last cycle, so the risks are very much minimized here as the GFRD offer is an all equity offer and would simply expand GFRD's balance sheet incurring no debt. Bovis would definitely benefit from being taken over by a well run company like RDW or GFRD with strong management structure and internal controls, and I do think the size of the landbank could complement RDW who's landbank is very thin given their growth aspirations. I think GFRD is the better fit though geographically, and their CEO was bought in from TW. specifically to ramp up their linden homes house building arm- badly run bvs looks just the ticket! Very interesting times.. maybe someone will swallow up the more digestible bite sized Inland Homes which looks cheaper than even the dog Bovis on net assets!

Not sure why parts of my message have been censored out below! Should say Share.. for.. share.. exchange (doesn't seem to like it if I write that without the dots-strange!?)

Depends what any agreed offer is. GFRD deal is, at the moment, a share for **************, which means simply that if a deal is agreed all your shares will be exchanged for GFRD shares in the agreed proportion. RDW offered part cash and part share for **************, in that instance if agreed by shareholders you'd get part cash and then an agreed portion of RDW shares. Bovis board rejected this idea though as they said the cash element didn't crytsalise value for BVS shareholders which is true, especially given the share price is now above their implied offer. BVS would then be de-listed after a takeover and you'd just own the shares in the combined entity under the taking over parties listing (Ie GFRD or RDW or whoever take them over). RDW have confirmed tonight they still hope to strike a deal.. both RDW and GFRD have until 9th April to confirm their intentions to make a bid.. interesting times!

Hi Bazz, Extremely hard to assess prices over the short term, especially given the uncertainty once article 50 is triggered and the wave of EU elections over the next 6 months. Much will depend on these macroeconomic events so valuations go out the window really unless you can predict the outcomes of external factors like these! That being said CRST still offers the best value in the sector IMO over the next few years on an earnings and yield basis (TEF also another good shout). Price wise, if I had to pop a figure on it, I don't think you're far off with your £6 target in the shorter term. We will lose 19p next week mind as we go ex dividend, £6 maybe on the half year update if macro economic stability continues.. I've been topping up on INL recently, looks very cheap compared to sector peers on a net asset basis, cheaper than Bovis which has received two takeover approaches. Interesting times!