Member Info for Nige_W

Hi graham
I sent a message at 02:25 this morning explaining why I thought coronavirus and even a recession should have little affect on Builders. Certainly had a massive affect on Sp, but this just makes them better value.
One thing is for sure Sp will recover to previous highs - just don't know how long that will take. A vaccine would be good.
BoL

Hi Tom
Thought I should explain my point of view a little better.
Value is not simply a matter of adding up all the assets, future prospects play a big part. Given the virus the market believes tw prospects are far worse than they were. In the short term this is not true because we know their forward sales which should keep them going for about 6 months, while longer term (as the article said), builders are resistant to flu etc, also confirmed by latest reports.
However, Govts are creating such tedious rules to restrict the spread of the virus that it could easily lead to a global recession.
Is this progress? If you got Spanish flu in 1919 that was unfortunate and you could die, but basically there was nothing you could do about it. There but for the grace of God go I. The recession could kill more people than the virus, so there must be a balance.
As I replied to Bamps, even if some people are put off moving cos of current concerns, this does not change the net supply / demand imbalance. We urgently need many new houses, regardless of the possible recession. So I don't think a recession will affect Builders value, or a bargain price has just turned into a Steal. Now builders worth 3 times current Sp.
Yet again all builders reflect each others Sp's this week, all down about 20% regardless of results just published.
Fwiw I think bdev the most undervalued now, so suggest you target them as well as tw.
Why wait for 150 when worth 500, but must admit Sp doesn't look like improving soon.
VBoL cos last few weeks have hurt

Hi Tom
I make a distinction between Value and Sp. The market decides the Sp while the value is what you think they are worth. Mrkt Cap now £ 5,376 m = No shares in issue * Sp (164). If all tw assets sold it could raise £ 16,200 m. Not really as simple as that, but not a bad example.
So you can now buy an asset worth 492 for 164.
How many less houses are tw going to build cos of flu, or (if no decrease) the value has not changed, just the Sp.
BoL

Hi Troubles
Interesting question. Traditionally Utes do well in a crisis (still need gas, electric, water...) I don't watch any but suspect they have gone down a bit less than the rest of the market. Also Bog rolls, soap, shampoo... or almost anything you need on a regular basis.
The thing is about this crash is that almost everything gone down by about the same amount (apart from Oil - separate crisis).
So if Utes down a lot, a good long term buy. Trouble is they usually have so much debt I completely avoid them.
Which leaves Builders, who have overcome all the obstacles they used to have. Cyclical (No more), dependant on the Economy (never was the case, dependant on Interest rates), big debts (now loads of cash). Again good for long term.
Short term any Pharma that comes up with a vaccine, mask makers, but too many to pick one (and probably only on will make it big time).
BoL

Hi Troubles
Just to be clear that is their value based on fundamentals and a Per of around 20. Don't expect it will reach 500 for a long time, as long as the market holds its misconceptions about Builders.
Your chances of meeting a carrier are No of infected people / Population = SFA%. And since you are out in the open little chance of being infected anyway.
Now for a Trump idea. Make all Office workers build houses. Less chance of spreading the virus, Housing crisis solved and no recession cos everyone is still working.
BoL and have a good walk

Hi Tom
I don't think that was a negative article at all. Historically builders not affected by pandemics, Economic slowdown doesn't affect them (just been thru austerity).
Even to close sites for 3 months (why not 3 years?) will do no more than delay their profits, which, cos they are so rich hardly matters either, and if sites closed all work would have to be stopped cos builders in the open air so less liable to spread the virus.
I don't think the virus has changed the value of tw at all, but certainly changed the Sp. Yield well over 10%, cash rich...
Now just a matter of timing the Buys. No idea how low they could go, but hardly matters when they are worth better part of 500 Imho.
BoL

Thanks Troubles
I never said flu would not affect Sp, but am amazed how much it has, particularly cos I think builders are a safe haven from the virus. We will be back in time but don't think that is a short time. Maybe a recovery over the summer, but until a vaccination created, things could be bad news next winter.
Another massive overreaction by the market - Short term alright cos of forward sales which will take months to clear, and no change to long term.
Austerity and Brexit did not affect Builders (as proved by their results), but these lessons have not been learnt by the market, so I don't expect much of a rebound in Sp any time soon.
BoL

Hi Graham
Not checked your numbers - tw could have dropped to 161 but now 181, LSE forgets Sp's occasionally. Even at 181, Yield > 10%, but fundamentals brilliant, so market all wrong again.
If you calc tw Sp on a justifiable Per of about 20, then Sp should be more than double the price, particularly cos builders are less affected by Flu, Brexit, Politics... So fantastic value.
There was a rare post on Ibstock which I looked at. A quick glance at prev posts show price movement which has been a disaster for them. I said previously that I didn't like their fundamentals and given the increased demand for bricks, I think their management couldn't organise a P*** up in a brewery.
BoL

Hi TLW
Don't know what Nano can say pending these bids / court cases. Imagine that is in the hands of the people who Nano have employed to carry these things out, and almost certainly would have to be approved by those companies.
Info would be nice but maybe Nano can't publish anything cos it could compromise those companies work.
Current number of interested parties must be 2 or more, otherwise the process would be over, as suggested by BBD.
I must admit that confidence in Nano management is at an all time low (hence Sp).
Anyway, I'm hoping for a big out of court settlement with Samsung (damages + lost Royalties + new Contract) with Proviso that Nano stops the FSP, so Nano can remain independent and would able to continue their R & D.
Don't know where that would leave the Sp (but a lot more than 10) and still hoping for news soon cos FSP and court case imminent.
BoL

As far as I'm aware FSP is still in progress, what makes you think it is over?

Sorry
if you were not put off buying...

Hi Bamps
Don't know what affect algorithms has on Sp movement. Suspect it could create the bounce after slump today.
S & P fear factor justifiably high now, but I don't think uncertainty a significant factor in supply / demand imbalance. If you were not are put off buying a house because of it, it implies that you would have to sell your existing house in order to Buy. Then 1 sell, 1 buy, else (put off) 0 sell, 0 buy, so net change nil.
Whether algorithms caused the slump yesterday, I don't know, but my point is Flu, Oil... does not affect value of Builders even if it does affect Sp, leaving an opportunity.
BoL

Hi Graham
Oil War just as irrelevant to Builders as Brexit, Politics and Flu. Since the Banking crisis builders have continually increased EPS - despite continuous -ve sentiment. When will the market learn?
BoL

Hi Troubles
Wish I knew. I think if Sp rises 3 days in a row it indicates a turning point, but could turn again if more bad news. Then my plan is to borrow say 25% invest, when that made say 25%, borrow another 25% …
BoL

Hi Tom
The Market is mad. How many less house sales will tw make because of flu? From the accounts we know they have made loads of forward sales, so OK in short term and since flu has a limited time, then everything will return to normal.
Has it changed the value at all?
Same applies to nano - value depends on court case and IP - not flu, even if it was the Black Death.
I'm very tempted to use some credit to buy, but will wait to see Sp's bottom out.
BoL

Hi WiganW
So builders Sp's could fall even more, but that makes them even better value, provided you don't sell.
Hi ilikehb
H2B was no more than a publicity stunt by the Govt, which does not affect supply / demand, so ultimately does not affect builders. I sent a post concerning builders suppliers (Sun 01:45) on Ibstock and Tyman and said that those 2 companies fundamentals did not impress me. Both still on my watchlist but on the verge of deleting them. I see no reason to change my point of view.
Builders got so fed up of suppliers being unable to produce for their increased demand, they started making Bricks, Timber Frames and Roofing Tiles... of their own. That is serious mismanagement by the suppliers.
BoL

Hi Ben
Got a pal who is invested (long term) in Ibstock (who I think make bricks). His reasoning was if house Builders doing well then their suppliers should also do well. Tyman similar, door and window fittings I think, I looked up the fundamentals of both, and basically was not impressed.
Now psn make their own bricks while builders moving to timber frames (psn have their own again). Heard anything more on psn concrete bricks?
Rewriting my system again so not quoting numbers much but
Dec 15 FinRes: Eps 14.9, Sp 197
Dec 20 FinRes: Eps 21.3, Sp now 200
Virtually no change in Sp while Profit increased by 43%. As I have said Builders should be a safe haven (like Gold) in troubled times (Brexit, Politics and Viruses), but not regarded that way by our Market (unlike the US).
I'm with HSBC who allow you to borrow up to 50% of your trading account at very low interest rates (and no questions). Very tempted to go for it right now. I owe them £481 at the moment, but just got psn Divi so will be in credit again.
Done nicely out of ggp (av 2.82, profit 65% after topping up), original tip from Bamps - worth watching his posts!
Enjoy your Hols, still wet and windy here, but not as cold, so don't think you would be making much money.
BoL

Hi Ben
Don't think you are very likely to get flu in the Caribbean (too hot).
Just did a google search on "UK Deatsh from Flu" and got this:
vk.ovg.ox.ac.uk/vk/influenza-flu
"In rare cases flu can kill people who are otherwise healthy. In the UK it is estimated that an average of 600 people a year die from complications of flu. In some years it is estimated that this can rise to over 10,000 deaths (see for example this UK study from 2013, which estimated over 13,000 deaths resulting from flu in 2008-09)."
So far 2 Deaths in UK, but a new type of Flu !!! Was 2008 - 2009 new, or just an existing one? The Banking crisis devastated the Building industry about that time - not flu.
What is driving this Country now - the Media or Politics? I don't remember a flu crisis 2008 - 2009, maybe the banking crisis a better disaster for the Media?
Now bdev down by 15.2%, rdw 15.8%, bwy 16.6%, psn 18.0% (but after XDivDt) and tw 13.8% since close prices 21/02/20, didn't tw do well!
Of course nobody needs houses when we are all dead, but TWO ?
This could affect Builders prospects, but tw just published FinRes and Short term OK cos of future sales, (to be built), and see no reason for this to change (ie Long term also OK).
Still think tw worth better part of 500. So this is an opportunity cos the Market is daft, even though I am part of it, so maybe I'm daft as well. Besides the idea that the market is always right, another idea is that it always overreacts.
BoL - not that you need it, and are you back into tw? If not (could go even further down) watch the price, and I suggest you get in soon. Also bdev which I think is even more undervalued.

Hi Tom
End of Day (on week) tw up 4.4%, bwy 1.8%, bdev 2.4%, rdw 3.1% and psn 5.8%. All is madness cos of wild fluctuations but at least positive. For me bdev and tw most undervalued, no idea why psn doing so well.
Tw and psn have just published FinRes, yet Politics, Brexit and Flu seem to have more influence on Sp than Real Data.
In the process of replacing my old system with my new one so not quoting many numbers yet (Pers …) but should be there soon.
BoL

Hi Tom
Tw up 3.9% this week, rdw 2.6%, bdev 2.8%, bwy 3.0% and psn 7.1%. The market moves in mysterious ways
No formal offers have been made YET but still in process. Some interested parties have been rejected. I don't think anything much has changed, but the market certainly does! I cannot believe IP worthless and offers will follow.
Could be an opportunity but I'm not going for it.
BoL