Member Info for Nige_W

Hi Strictly
Shame about tef, I avoided them cos Aim and mainly London Based. Same reason I don't touch crst and bkgh (London) but prefer bkgh to crst. Made good money out of bkgh but out now.
Bit worried about rdw cos chairman, Steve Morgan has retired. Also still a major share holder (which he might sell).
He took over his Father's (little plumbing) business and turned it into a National Building Coy. Last time he retired Sp went south until he started taking more control of his company.
Totally agree with value idea, and from this point of view Imho psn the best value by far, due to the serious -ve media publicity.
Rel Price when 04/01/19 = 100 and last date 05/07/19:
psn = 96, tw = 114, bdev - 121, bwy = 105, rdw = 109
What is more important is the new psn Ceo has addressed the issues and results are already emerging - see last Trading RNS. Bdev and tw have far more cash than bwy and rdw which justifies a higher rating, and created their momentum (from the deluded market).
A House price crash is built into the Sp for all these 5 Coys (due to Brexit) which simply won't happen. I have explained the reasons why I think this on tw and psn boards
But psn has far more cash and margin than both of them.
Very best of luck to you Tef holders, don't know if its a Done Deal or maybe a new offer comes in of 500.
Last point, management seems to have sold out a bit quick?

Hi St1
The scheme was daft to begin with, Govt should not interfere with business.
Don't think there will be a housing price crash (despite being built into Sp and whatever form Brexit takes).
Good to see Govt has a plan, but probably no time to implement it before their Jollies and / or Brexit, GE.
Since every major increase in interest rates leads to a recession (and building slump), pretty sure BofE won't do that (at least not major increase).
So, as you were, business as usual and we muddle on.
Critically if GE (which I now regard as probable), the 2 party system is broke. A coalition of Cons and Brexit or Lab, Lib Dems and Greens would be a disaster Imho.
SNP, Dup could ally themselves to Brexit in order to get independence, and all sorts of other horrible possibilities. You agree to this and we will support that (Tuition fees)…
BoL

Just found this on Amino board:
"With a p/e of sub 10 and a yield of around 9% this share is either way too cheap or the trading prospects for the company are very questionable."
Cf psn they are massively overvalued. They have a margin just less than 10% but no debt.

It hardly matters if these numbers are right or wrong - it shows just how -ve sentiment is against Builders.
BoL

Exeter
You have a habit of twisting facts and adding your own (incorrect) guesses to news.
The article is about 1 year old (History), and nowhere in it did it say psn will lose HtB. If insulation issue existed when the article was written, don't you think they would highlight this fact at that time - particularly if it was going to cost £ Bns (not 1 hour per house).
Obviously standards fell under old Ceo in rush to Build, but great improvements have been made by new Ceo since then (as reported in last trading RNS) and acknowledged by the BBC.
Britain invades Iceland (true but in 1940), thousands dead (incorrect guess - no deaths), just about sums up your messages.

Hi TMT
Don't know if you noticed tw initiative Rent to Buy (RtB) which could replace HtB. Rent for up to 5 years then buy property at a discount. Think it is a great idea, even though I think the demise of HtB will have no effect on builders, this could counter any -ve effect and / or Boost sales.
As far as I know only 1 trial and no Info since. Anyone any Info?
BoL

Hi Johnson
Sent message on Friday afternoon, I meant Prev Friday close.
Per from Company Refs (which has not arrived this month) hence out of date Eps estimate. Should not make much difference.
Hi TMT
You think a Per of 30 is unreasonable, and you could be right. One of the critical factors is Eps Growth which (I think) is only 10.8% - maybe a bit low for Per of 30. Don't see Per getting above 15 in medium term, but still almost double Cur Price.
Per 20 max cos market takes years to change its attitudes, even if it should be 25.
Also, good to see change in BBC attitude from Troubles Post. If this is reflected by rest of media could see Sp clawing back some of the 20% it has lost.
BoL

Hi Tom
Jag very pretty but impractical - 2 Seats no Boot.
M5 Auto, 4WD and Turbo - not proper.
Gotta be M4 again.
BoL

Hi Johnson
Price to earnings ratio so Fri Close price 1997 / 255.8 Earnings per share = 7.8 Per. The lower the Per the better. One way of looking at it is if Per is 5 it take 5 years for Earnings (profit) to equal Sp, or if Per = 20 it will take 20 years. An easy way of comparing companies.
Couple of things to remember Ftse 100 av about 13 (or used to be) so compared to them psn very cheap.
If psn had a Per of 13 then the price would be 13 / 7.8 * 1997 = 3295.
Some things justify higher than average Per's, such as rapid growth, high margins, loads of cash, massive potential...
Given 30% Margin and > £1Bn cash I don't think my assumption of a Per of 31.2 is unreasonable leading to the Sp of £80.
Such a low Per is often regarded as a company with serious problems like massive debt, low margins, decreasing sales, or closer to home a, collapse of sales after No Deal Brexit.
The market has massively overreacted as usual, creating a massive opportunity.
BoL

Hi Johnson
Yes £80 per share, possibly £100.
Don't expect that will happen, but that is what I think they ae worth simply based on Per.
Impossible to guess where Sp will go in short term, but expect a rise when Brexit sorted.
As I said in prev message Sp doesn't really matter if you are not going to sell (my av 2061). Definitely not selling any until Sp > Float price (2624), so looks like I'm stuck with these for a while. Anyway good Divis.
BoL

Hi TMT
Just sent a long message on tw board explaining why I think Politics, Brexit and HtB should not affect Builders much. My calc of 8000 value is justified (given the not unreasonable Per), but as I said its not going to reach that.
The point is it hardly matters when Divis so good. Example:
By using Base value, Float and Last In First Out method (so you never sell your Base value).
Bwy bought 12/12/13 @ 1423, Divi 50.4 pps = 3.54%, XDivDt 23/05/19, price 2967 = 1.70%. No float in bwy. (Int Div).
Apply that to psn, tw and bdev means yield = 20% +
When Builders are flat out a small decrease in demand won't change anything - still be able to sell everything they can build (and remain flat out).
My only concern is Eps Growth is decreasing - need to import more EU Labour.
Possible reason for that is after banking crisis put 50% + tradesmen out of work, some of which returned to building when things picked up, there are none left to return now.
BoL

Hi Tom
Not looking good for psn - that is for sure - But IMHO
Builders are the most undervalued sector in the market, and psn the most undervalued Builder. That is why I invest here, in the belief that the value will be realised eventually.

Some reasons for this:
The market believes Builders are high risk. Simply incorrect when the big 3 hold so much cash and such high margins. During banking crisis psn almost unaffected cos they just cut production and laid off subbies.
The market believes the sector is cyclical based on the country's performance. Builders performance based on Interest rates and mortgage availability - not the country's performance. It was cyclical, but there hasn't been an interest rate (induced) slump for almost 30 years, and won't be cos BofE in charge of Int Rates now. Market out of Date.
The market believes Builders will be badly effected by Brexit uncertainty. Civils have been but Builders booming since Banking Crisis. This has been proven by performance of Builders / Civils since 2008, but market ignores the evidence. Builders performance depends on supply / demand difference which is not going to change. Also this infers a No Deal Brexit will have almost no effect on Builders.
The market believes an end to HtB will badly effect Builders. Not true - won't effect roofs required and so supply / demand. HtB just means 1st timers buy a house > than they can afford, which they (often) will never be able to pay off, besides costing tax payer £Mns. Daft idea to begin with.

The market believes all the above justifies the lower Per's (and manipulates Sp accordingly).

I don't read Investment books but think that if you can spot value then go for it. Could be a good time to sell (some or all) psn with intention of getting back in later. Then (knowing my luck) BJ states we will not leave EU, Sp rockets and I've missed the Boat. Not as daft as it might sound. BJ will do anything to become PM, he was a remainer, and by reverting he could stop GE and remain PM.
Value remains Value, investing on momentum is gambling. Think WB might have said something like that. Still believe psn worth 8000 but its not going to reach that for a long, long time. Probably have to wait until Brexit sorted before much increase in prices.

Have a great W/E, Big Divi coming soon and what could possibly replace your M4?
BoL

Hi TMT
On a happier note I just valued psn at 8000 on tw board.
IC has psn as a sell so I wrote:
"I'll answer my own question. If Per was 100 then sell rec OK.
But according to my (out of date) numbers Sp 1997 (Fri close) my Est of Eps 255.8 so Per 7.8
Could argue Per 31.2 justified by Margins and Cash (= 4 * 7.8) so fair price for psn about 8000 and anything above that is overvalued. Definitely not overvalued!"
Not going to happen any time soon but Imho a per of 31.2 IS justified by Margin and Cash, maybe even 5* = 10000.
Have a look at tw board and BoL.

Hi Exeter
Very close to filtering you. Not going to argue about how many need to be done (1 hour) nor air bags, but to call into question basic accountancy methods means you are not worth reading. Profits (and everything else) all published in Audited accounts and I know exactly what Divis I have been paid.

Hi Bazza
I'll answer my own question. If Per was 100 then sell rec OK.
But according to my (out of date) numbers Sp 1997 (Fri close) my Est of Eps 255.8 so Per 7.8
Could argue Per 31.2 justified by Margins and Cash (= 4 * 7.8) so fair price for psn about 8000 and anything above that is overvalued. Definitely not overvalued!
BoL

Hi Exeter
You never justify your numbers - £Bns, £350m. psn inspecting 3,500 houses in SW - most are OK, so need no action.
Even if every house needs doing 350,000,000 / 3,500 = £100,000 per house, for 1 hours work! Not even Pablo Escobar on that sort of money.
Fix takes 1 hour so no need for accommodation.
Been driving for almost 50 years and vast majority of my cars never had air bags. Also smoke and Drink - should be dead long ago.
None of the remuneration committee responsible for Ceo bonus (nor the Ceo) work for psn now

Hi Bazza
How can you have a sell rec on a Coy with 31% margin and > £1 Bn cash?
Don't mean you personally, IC daft.
BoL

Hi Johnson
My system says 3.8 pps (same as FinDiv) in BGreen (indicating confirmed as opposed to yellow last year).
Think this was published in FinRes RNS.
BoL

Hi TMT
I did some research on Sp Pre and Post XDivDt - inconclusive. Seems like if sentiment +ve Sp surges before XDivDt and recovers quite quickly, else no surge. So chase Value not Divis (but need to be patient).
A couple of threads on tw board I have been involved with are the cyclical nature of Building, justifying the low Per's. I contend that building is no longer cyclical cos if you ignore the banking crisis, the last slump was almost 30 years ago. You can hardly say something is cyclical if the cycle is 30 years +.
Other point Help to Buy. Builders are Flat Out right now so if HtB stopped tomorrow, a 1st timer might pull out of sale, but an existing owner will buy on Monday. Makes no difference to supply / demand.
For these reasons I think Builders are the only place to be (cos fantastic value) and not too bovvered about Divis. Having said that I've just picked up 5.3% from psn, 3.5% on bwy (divi 50.4, av 1423, cur 2777) and about to pick up 6% from tw.
I am sure you will do very well here, but not expecting much until Brexit sorted.
Critical question is do you bail out now hoping for news that makes the Sp plummet, then reinvest, or just Hold.
NigRule 1 - when in doubt do nowt!
BoL

Hi Tom
Market masters not involved any more, replaced by computer system (with letters I can't remember), Type A (automatic transactions). System matches Buys to Sells and occasionally the odd share turns up. (Buy 100 matched to a sell of 50 and a sell of 49, so still need to buy 1 from next seller).
This does not mean that it is not a communication method, but between who and why I don't know.
BoL

Hi TMT
You write great posts, so my following minor point is not a criticism.
I agree that major investors build into the Sp the upcoming dividends (leading to Base price + valuation), but not all the investors are that big. The question is whether they adjust holdings (and so Sp) enough to counter the rest, which I doubt.
My contention is Sp varies depending on sentiment, paper articles, greed... far more than the major Investors can control. Hence a surge in Sp about 3 weeks before a major Divi, and the ridiculous amount Per and so Sp has dropped due to Brexit (about 50%).
Not only that but Imho Per's should not just return to Pre Brexit levels, but should be far > than that (justified by huge cash reserves and margin). Round numbers 100% increase on current Sp. This applies to the big 3 (psn, bdev and tw).
If Rel Price 04/01/19 = 100: bdev 121, tw 113, psn 100.
From this point of view bdev overvalued, psn undervalued, but then you must decide how much to discount psn due to Brokensh*t and bad publicity. I think 20% is far too much.
Big investors would say far too many amateurs about!
Also if they drive the market they also suffer from the misconception that Builders fortunes based on Countries growth - not supply / demand.
BoL