Member Info for Nige_W

Hi Graham
Is this a surprise when Trump pursuing Trade Wars?
The market won't agree with me but this should have very little effect on House Builders - makes no difference to the supply / demand imbalance, won't affect mortgage availability nor interest rates. Best place to be in a recession.
BoL

Hi TMT
Read your article, very interesting. I will reply later - don't have time now.
BoL

Hi Strictly
Whether by acquisition or great management psn expansion has been meteoric since going public in 1985, to Ftse100 now - wish I bought some in 1985! see:
https://en.wikipedia.org/wiki/Persimmon_plc#History

A change in culture was needed and this is in progress.
Think I said before that I don't watch PBV, my key params are Eps, Margin, Cash, Divis and Per. This is based on spotting growth shares (from DotCom Boom/Bust days).
Have to wait and see what happens on 20th (btw I'm expecting a disaster - did you notice my conspiracy theory?)
As to best value interesting point. Psn holds far more cash than bwy and rdw so deserve a higher Per (as do bdev and tw) but as long as the coy not going bust, I don't think it matters much. Or to put it another way bwy and rdw are better value cos their Sp has been discounted more because of this.
Also, another factor to take into account is psn pays a far greater Divi, again affecting Per.
Main point psn Per so low because of -ve sentiment due to -ve media. This is an overreaction (Imho).
I imagine there is a formula that could link all the factors involved producing a justiiable Per, so if actual Per lower than just Per then good value. Still doesn't help much cos all builders are great value - then difference deciding factor.

Noticed you are a big fan of crst. I ignore them cos L & Se. I did very well out of bkgh but out of them completely now for same reason. I think high prices down south are unsustainable. TMT posted an article saying due to anticipated low £, more foreign buyers driving up prices again.
BoL

Hi KOsh
Some great advice from posters below.
Main points I think we all agree on are Builders are fantastic value now but could drop in price even more in short term due to Brexit. When that sorted they should recover significantly.
If I was in your situation I would invest a small amount in the big 5 (bdev, psn, tw, bwy and rdw) and add to the Coys that perform well (hence spreading the bet, but avoiding London SE Coys bkgh, crst, bvs and csp).
I suggest you have a look at the other 4 - bwy and rdw might not suit you cos less Divis and Cash held. But certainly think you should not have all your pension in 1 place.
No idea what or when the low point will be (maybe we are at it now?), but I expect the improvement to start Spring next year.
Hi Bamps
Never said tw least undervalued - that is bdev. According to my (out of date) system, least to most undervalued by Per's:
bdev 8.8 (Sp 637, Eps 72.7)
tw 7.4 (148, 20.0)
psn 6.7 (1899, 283.0)
bwy 6.7 (2806, 421.0)
rdw 6.4 (554, 87.1)
Eps are my estimates (and so Per's) - could well be wrong.
BoL

Hi TMT
Having re-read your post it seems I agree with everything you say, again!
What do you think of my conspiracy idea? PreInt are not audited accounts (so basically they are for guidance only - say whatever you like). But if say a 5% drop in Margin (for a Ftse100 Coy - which would make most others turn in a loss), it will be all over the headlines, yet still a 26% margin !!! Next step is for investigative journalists to find out why.
Ah - they say, the new Ceo is fixing all the issues created by the last (sacked) Ceo. What Great publicity for a change. Should help potential buyers confidence considerably. Wonder if BoD will start Buying ? Manipulation ??
Even if I am right I am not selling any more in anticipation cos down to Base value (which I never sell), av 1535, but a small loss in Deals completed. Profit held in shares > than that loss (at the moment).
So sticking to orig plan - buy at low point after IntRes, sell on rebound, all a matter of timing which I'm not great at.
All depends on Sp % ages of loss and gain after. I also think that given a stable (no Brexit) idea, my Float system can increase profits by up to 20% pa, the current situation should enable much > 20%, if your timing is right.
Need a better crystal ball!
As I have said all builders are fantastic value, so don't really need to do anything - just be patient.
Might have a flutter on bdev XDivDt and Psn IntRes but not going to commit much until some sort of Brexit resolution. Traditional Sp increase for builders is from about Xmas until early Summer which coincides with Brexit result.
Hope you have sorted W/E issues and BoL

Hi Bamps
Got XDivDt at 11/10/18. Makes sense 12/10/18 sp 514
Lead up 31/08/18 542, 07/09/18 563, 14/09/18 556, 21/08/18 560, 28/08/18 567, 05/10/18 557.
Don't know what was happening with Brexit at that time - as I said Brexit messing everything up.
Maybe I get in 5 or 6 weeks before XDivDt and sell 1 week before (or if things look good hold for Divi).
BoL

Hi TMT
Not worried about missing the Boat. If BoJo changes his mind and decides to revoke article 50, Sp will rocket, so need to get in quite quickly (profit taking will slow the increase in price a bit so shouldn't be too difficult).
My last sells ranged from 1906 to 2315 Av 1988 so as long as I get in before that I'm OK.
Same applies to 3 of my other 4 Coys (but more so) - the exception is tw where I still hold some float but at Av of 178.
I probably should sell those as well but don't like to take the 20% loss.

Concerning your other points.
Corbyn won't get in unless in a Coaltion who will prevent him from doing anything too daft.
Help to Buy doesn't affect supply / demand so should have almost no effect
Brokensh*t gone and just words anyway. Could never be implemented.

Much more worried about affect bad publicity has on buyers perception of psn - could take years to recover, but hopefully will not make too much difference as long as supply so much less than demand.
Only 7 days to Interims which I still think will be terrible. This could be part of a plan to highlight the work the new Ceo is doing in addressing the issues. Or is this a conspiracy theory too far?

BoL

Hi TMT

Working late as usual. Just did a little table using LSE Per's.
Coy, Price, OPer, CPer, Proj, UVal%
bdev, 637, 12.0, 9.6, 796, 25.0
rdw, 549, 10.0, 6.1, 900, 63.9
bwy, 2812, 10.0, 6.6. 4261, 51.5
psn, 1912, 14.0, 6.7, 3955, 109.0
tw, 148, 12.0, 7.4, 240, 62.2
I think LSE uses last Eps and maybe Sp on that date ie Historical Per.s.
My system works on Projected Per's from consensus brokers forecasts (from CoyRefs which I haven't got, so my guesses).
If you create the table and you use my numbers, you will get different undervalued amounts. So my Estimates of Current Per's:
bdev 8.8, rdw 6.1, bwy 6.6, psn 6.7, tw 7.4
This creates my undervalued % ages as follows:
bdev 36.4, rdw 56.3, bwy 49.3, psn 109.0, tw 62.2
psn and tw the same but interesting variations in the others.

But as I say variations hardly matter when they are so undervalued.
The crucial thing is how long it will take the other companies to catch up with bdev.

Still think my idea of holding a Base Value and Float is best and moving the float between the Coys depending on upcoming Rns's, and Divis. I calcd in normal years this could increase profit by 20% but all things Snafu now cos of Brexit.

BoL

Hi Wilfie
Thanks TMT, you covered some of the points I'm making here.
First of all I have no idea what the political situation will be by Xmas. Corbyn PM in coalition with LibDems Greens SNP or Farage PM in coalition with Boris & Cons. My point is it doesn't really affect Builders. Demand will remain higher than supply, no change in mortgage availability and interest rates will remain low. So nothing to worry about.

Only 2 options possible now - No Deal Brexit or No Brexit.
I think if no Brexit Per's will quickly (a few months) return to Pre Brexit levels inferring about double current Sp's.
If No Deal Brexit it will take a long time (maybe 4 to 5 Years) for Sp's to recover as the Market realises Brexit has no effect on Builders profits.
If, by some miracle, a Deal is agreed then somewhere between the two.

Couple of daft points - Firstly according to my ideas builders Sp's are about half their real value and it doesn't matter what happens with Brexit (apart from the recovery rate).
Secondly - How could anyone vote for BoJo when all he does is lie ALL the time. He never had any intention of making a Deal with EU (besides his Brexit campaign).

BoL

Hi Johnson
These are my systems estimated dates / values. Just checked Divi (and XDivDt) should be declared with FinRes around 04/09/19 and the amount should have been 35.2 = 5.52% @ 638 (35.2 last year, not 34.4 year before).
My base value (all my holdings there now) av price is 402 = 8.76%, so very happy.
BoL

Hi Bamps
System says bdev XDivDt 11/10/19 (34.4 pps) = 5.39% @ 638, so I expect a rise in Sp as that date approaches. I intend to buy some 2 or 3 weeks before then maybe sell them 2 or 3 days before XDivDt.
An even riskier strategy is to buy psn just after IntRes (on big drop of Sp) and buy back as Sp recovers.
Riskiest strategy of all is to buy gfrd in hope of a T/O.
What have you got against bwy?
BoL

Hi Terrace
Sent a message on psn Board "Why the Market got Builders all wrong." yesterday, where I basically claim the Per's are so ridiculously low it makes them the bargain of the century. I also claim builders are no longer cyclical and infer there is no turning point in value in the near future.
Critically the big 3 (bdev, psn and tw) have loads of cash now and massive margins. No way can they go bust which is inferred by Per's. This was proven by psn during the banking crisis which had almost no effect on them (unlike tw and bdev who almost went bust, cos of massive debt at that time).
Having said all that I am mainly in Cash at the moment cos I think Sp's will drop even more before a general recovery after October. How long this takes depends on Brexit, but I believe Sp's should be 2 to 3 * current levels (let alone 10%+ Divis).
BoL

Ps
I ignore London & SE based Coys bkgh, bvs, crst & csp cos not growth coys now, even though I did very well out of bkgh (a very well managed Coy). Prices too high and unsustainable. They will certainly suffer more from No Deal Brexit than the rest, as financial services removed from London to EU. Should have almost no effect on National (Shire) builders cos that is probably all that is left of UK, London the Shires and a few Tax Havens - no Scotland, Ireland or Wales.
Always thought Brexit too difficult , but now No Deal Brexit probable - time to migrate.

Hi Wilfie

First of all there are 5 factors to watch (for growth shares).
Earnings per share - Should be > last year, Warning sign if decreasing
Total Dividend per share - As above
Borrowing - As above - Note -ve borrowing means cash in hand so should become more -ve!
Margin - As above
Price to Earnings Ratio - The lower the better

No other companies compare with builders for the top 4. Per is rather like a measure of sentiment, the lower it is the more the market dislikes the company and vice versa. Given the Per's for Builders the market really hates them!
The reason for this is the market suffers from several misconceptions (see my last post).

Looking at the fundamentals the obvious comparison is bdev (FinRes) to tw (IntRes). Psn IntRes not due to 20th. Prev year in brackets.
Earnings per share bdev 72.5 (66.5), tw 20.0 (20.8). Note tw IntRes 7.4 (8.2) so 20.0 for year looks generous.
Divis not fixed yet so no comparison.
Borrowing bdev -982 (-784), tw -392 (-668), ie bdev inc cash, tw dec cash.
Margin bdev 18.9 (17.7), tw 18.0 (20.0).
Or bdev powering ahead, tw going backwards. This is because tw addressing Quality issues which has effected their profitability. Bdev didn't have to cos no issues. This is why I expect psn IntRes will be worse than PreInt forecast, and probably worse than tw.

I have estimated Eps to calc Per's as follows:
bdev very popular now resulting in Per 8.8 (Sp 637, Eps 72.7)
Tw in trouble after poor Interims Per 7.4 (Sp 148, Eps 20.0). Don't expect any recovery soon.
Psn Per 6.7 (Sp 1899 Eps 283) - don't think interims will be that good.
Rdw Per 6.4 (Sp 554, Eps 87.1) - No PreFin
bwy Per 6.7 (Sp 2806, Eps 421)

The fact that these numbers differ quite a bit from my last Estimates is probably due to my mistakes, this is the advantage of using CoyRefs so Dyor, and please correct me if I have produced incorrect numbers.

Overaction to media. Bad publicity has seriously affected psn Sp (and to a lesser extent tw and bwy). As I have said I think Psn IntRes will be much worse than PreInt which should lead to a big drop in Sp as PI's sell, followed by a recovery as FI's move in cos already built into Sp. Can't say which is best value cos all based on subjective judgement, Certainly bdev deserves the highest Per but probably the least potential growth because of that.

Last point, value is determined by fundamentals. Even if my numbers are not spot on it doesn't matter very much, if generally Coys Pers should be about double what thet are now, and so Sp.

Part 3 to follow, Politics and short / medium term effects on Builders, cos Brexit and Politics has totally messed up my system - too late now.

BoL

Thanks strictly
There was a problem when I last tried to sign in. I will try again.
BoL

Hi Strictly
Welcome to bwy but I know you are a great fan and have probably made many posts here in the past.
I also welcome all the other new posters here cos I think all input is good, so the more the better.
Been very lonely here for a while (and rdw). I suggest you have a look at psn board. An excellent post from TMT on advising a new investor on basics, well worth reading.
BoL to you all.

Hi Wilfie
The Market believes Builders performance is diectly related to performance of the Economy.

Simply not true. Builders performance is based on Supply / Demand, and depends on availability of mortgages and Interest rates. When the Govt controlled int rates an inc in rates would lead to a Builders slump (and an economic recession), but
this is not Chicken and Egg - Builders slumps caused by inc in Int rates, which coincidentally led to a recession.
Besides Banking Crisis (which meant no mortgages available), when was the last Builders Slump, about 20 years ago?
Builders have been thriving since Crisis because massive demand for housing and Mortgage availability and Low Int Rates.

The Market believes Building is Cyclical.
It used to be (when Govt controlled Int Rates), but no longer the case. How can you have a cycle > 20 years?

The Market believes Brexit will affect Builders more than any other Sector, (cos of -ve effect on Economy).

Well it hasn't (despite austerity and slow growth), as I said Builders thriving, while Construction (Civils) suffering really badly. Plans put on hold and very low margins as they all bid for the same (decreasing number of) contracts.

All the above is why Builders have been given a ludicrously low Per by the Market, and if Per's double so will the Sp.
Value will be realised, but don't know how long it will take.

I look forward to discussions on my ideas (maybe an argument that builders doing well now cos Banking Crisis put so many out of work, so they simply don't have enough people to supply the demand).

Don't have time now but Part 2 will be my idea of Builders comparative relative strengths and the Markets overreaction to -ve media.

BoL

Hi Wilfie
I will try to explain why I think all builders are massively undervalued and the misconceptions the market has which has led to this situation. Btw you can show your appreciation of TmT posts by recommending them.
BoL

Hi TMT
Averaged down to 1543 after selling remaining Float. Feel sure it will go lower particularly after Interims.
One thing to remember is you don't have to commit all reserve in 1 go. Maybe buy half float after interims and rest in November. In my system say Base value £1k, then Float £1k so buy £500 after Interims and £500 in November.
All numbers below from my system and estimates. System not working well now cos used to be based on Coy Refs (and their broker forecasts, but not got a new one since Feb).

Of building coys to invest in bdev very popular now resulting in Per 8.8 (Sp 639, Eps 72.7)
Tw in trouble after poor Interims Per 7.8 (Sp 155, Eps 20.0). Don't expect any recovery soon.
For comparison psn Per 6.9 (Sp 1953 Eps 283) - don't think interims will be that good.
Rdw Per 6.0 (Sp 543, Eps 90.0)
bwy Per 5.8 (Sp 2921, Eps 430)
So best value are rdw and bwy, but rdw has lost its chairman (founder and ex Ceo) and neither have as much cash as the big 3. To sum up bdev too expensive now, tw recovery will be slow, don't know where rdw going after Steve Morgan, which leaves bwy. I think bwy a good steady coy and a nice balance with psn,
All Imho and Dyor (which I am sure you do) but I've made more money out of bwy than all the others.
Last point PreBrexit Per's were 10 to 14, which I expect they will (eventually) return to, inferring around 100% inc in Sp and when the Market realises that House builders are not cyclical; that could increase further.
BoL

Hi TMT
Just been looking at the numbers again, tw margin fell from 19.9% to 18.0% after IntRes (due to addressing quality issues) yet psn stating previous expected margin of 30.8% (in PrInt). I expect that to decrease by at least 2% which means a massive drop in Sp as PI's sell in horror, but perhaps a recovery after big FI's buy back on the new low Sp.
So my intention is to sell last Float in psn before IntRes (which should bring my average down to about 1500) and maybe buy back some on resurgence after (or wait until November?)
Big question is how much -ve sentiment already built into Sp, and who is controlling that? Doesn't really matter if you are LTBH, but in short term I think I can sell some and buy back a few more for same value.
As I said, a bumpy ride but if you can get the timing right you cam make money out of the bumps.
BoL