Member Info for Nige_W

Ps
Gordon Brown was unfortunate Banking crisis on his shift. Since Maggie T started deregulating Banking (and same in US) the crisis was inevitable. But as Chancellor, he should have been aware of the potential disaster, and done something about it (ignorance is no excuse).
BoL

Hi Bamps
Recessions caused by Increased Interest Rates, not chicken and egg. Consumer confidence lows caused by recessions.
Only thing that matters is demand far greater than supply, and this isn't going to change any time soon.
BoL

Hi TMT
Just sent a couple of messages on tw Board explaining my strategy and why I'm here for the foreseeable. I calc psn value at over 3200 now, but that does not include their justified increase in Per from Pre-Brexit levels.
No idea how long it will take to reach these prices but with the Yield I'm not too bovvered.
So I have no limit (like 2700). Time to leave is when you see decreasing Margins, Eps Growth, Cash and Yield.
I see no sign of that, nor that it will change much any time soon.
BoL

Hi Johnson
Thanks for the Article. Trouble is I disagree with almost everything in it.
First of all Builders used to be cyclical (due to Govt changing interest rates) but not any more (interest Rates set by BofE) and have been low for years, which will continue.
This alone invalidates the rest of the article, but then to try to justify his point of view he finds an obscure indicator, without explaining why they scream 'Sell Me!'
Then after saying Builders have few concerns, he mentions Help to buy, mortgage availability and increased Mats Costs as being other things that could destroy the Industry.
Help to buy makes no difference to demand for housing, if Govt / BofE sorted the Banks mortgage availability should remain good, Inc in Mat Costs of 5% could increase price by 1%, so what?
Lastly, he's inclined to sell, just before Brexit sorted. Given a return to Pre-Brexit Per's Builders Sp could increase by 50% and given the big 3's Cash Held they are virtually immune to any downturn (as proved by psn and bwy in the Banking Crisis).
All going Steady Away, BoL

Hi Owls
I hold a Base Value in each of the 5 builders I hold, and move a Float between them depending on Upcoming RNS's and Divis. Hopefully the companies I move the Float to perform better than the companies I sold. I think this could do 20% better than LTBH.
Using last in first out method you never sell your original shares. I sold all remaining float in bwy and rdw which reduced holding in rdw to 1st 3 purchases (Aug 2016) av price 378, now 578, profit 52.8%. Bwy 1st purchase (Dec 13) price 1423, now 2965, profit 106.5%.This also decreases CGT liability.
I expect to make no more than about 30 Trades per year (not including Isa's) and Dealing costs so low now, it hardly matters.
BoL

Hi Troubles
Just topped up float for tw and bdev from bwy and rdw (so putting my money where my mouth is).
Float distribution has little to do with Plan now, but things changing all the time.
May we return to boring times.
BoL

Hi Tom and Troubles
2 things just happened - good update from bdev today and market sentiment remains good (since start of year), or at least better than it was. So I remain hopeful.
At worst (price does not increase) I still get 5.98% Divi at 197. At best price reaches 214, then sell before, or hold for return to 214 after Divi Tempted to hold cos I am hoping for quick return due to more +ve sentiment.
Sp going North now until XDivDt so Isa move on Hold until after that.
BoL

Hi RtdBanker
Absolutely agree. Bad Press decreased Sp (by about 15%), and as TMT said New Management already addressing these issues. Momentum with tw and bdev now, but should you invest in Momentum or Value?
Just topped up tw, but already got too much in psn (to be reviewed in August - holding until then).
Gotta be patient to hold Value, cos no way of knowing how long it will take to be realised, Politicians and the Press don't change their attitudes quickly, nor does the market - resulting in this Insane position.
Per, Yield is Insane, point you didn't make was Cash > £1 Bn, - not going Bust tomorrow !
BoL

Hi Tom
tw sp now 177 so if goes to 214 then
Profit = (214 - 177) / 177 * 100 = 20.9%, in less than 1 month.
Pretty good return even if sell just before XDivDt !
BoL

Hi Bamps
When I was in Building there were no firestops (Brick/Timber or Brick/Block). The timber frame was treated so as to be fireproof (or so they said). The party wall of Brick/Block was a solid 1 Brick wall (so no voids), but miles out of date.
Nice to know no issue for tw.
BoL

Hi Tom
2 Brokers forecasts on bdev Board (cur 581). UBS 630, Deutsche Bank 792.
The fact they differ so much means it is easy to dismiss them as a waste of time, which I generally do, but they can have a big influence (eg Sp jump at start of year after Bank of America / Merrill Lynch statement).
Given same applies to tw then tw should be
178 + (630 - 581) / 581 * 178 = 192 or
178 + (792 - 581) / 581 * 178 = 225
Given no Brexit disaster I'm still hoping for 214 before XDivDt.
BoL

Hi Johnson
Far too complicated for me, and how a Company with tw's cash, margin and Eps Growth can only score 5 is a mystery to me. Doesn't mean much without comparative ratings (as Troubles said) and who scores 9 on their scale?
BoL

Hi Bamps
Sold rdw float and bought same amount in tw (decreasing rdw av to 383 = over 50% profit). Av float for tw now 179 and if it reaches 214 that is almost 20% profit (take it or Hold and wait for tw to return to 214 - then 20% and Divi for free).
If, as I expect, gradual improvement of sentiment, I think tw should regain 214 quite quickly after XDivDt, so will probably hold.
Will look up Victrex as well. Despite the fact that I think Builders will do very well over the next few months (post Brexit). This is so I can reduce my holdings in Nano and even if Croda and Victrex don't perform quite as well, much happier with a better balance. Am I in danger of becoming sensible?
Thanks for Info - BoL

Hi Bamps
Given the return to Pre Brexit Per's my estimate was 276. Also Pre Brexit Per's are too low Imho cos the big Builders are no longer high risk (cos of margins and cash). I calc tw Per at about 8, Pre Brexit about 12, hence undervalued by 50% (but based on old numbers which shouldn't change much).
I looked up crda and was amazed how I had not found them before (from Coy Refs), looks great to me. Critically to me, good margin, no significant debt, and still growing Eps. Need to check out details from Coy Refs when I get the next one.
Can't find the numbers now but (from memory Per about 20, Peg about 4). If tw per 20 then Sp would be 20 / 8 * Cur Sp = about 450. Not happening tomorrow (or any time soon!), but high Per for crda and Peg > 1 doesn't look too good right now. Adding them to my Watch list.
Don't know if Spec Div is holding Sp back for tw, I think most investors look at short term (hence FatCats go for Divi when Divi > 5% Sp).
Is tw worth 181, 214, 276, 300 or 450 now? - I think I know where W Buffet would be putting his money.
Still not worried about psn (the most undervalued).
BoL

Hi Bamps
Even the press has gone quiet about leasehold now, only company to make provision for it was tw (as far as I know). Think (hope!) it is History now. It should not be allowed for private houses (flats a different matter - but basically there has been no issues there).
Just a couple of small companys tying to rip off house owners, who have probably gone bust now.

Incidetally, tw and bdev outperforming all other (non Lse) big builders (bwy, rdw and psn). I think there are 2 reasons for this - tw and bdev have far more cash than bwy and rdw, so can't go bust, and psn has had so much bad press recently, they are about 15% behind tw and bdev (but most cash and highest margin).
This infers best value (or most undervalued) is psn followed by bwy and rdw.
The big Question is, do you go for value or short term momentum?
Don't think it matters too much cos Imho all builders undervalued by about 50% (psn 66%!) and will reach that when Brexit sorted, but not saying how long that will take.
BoL

Hi I'm Outers
I think you are making a big mistake. Psn has performed better than any other big Builder consistently over the last 10 Years, and not run by accountants (like bvs was before they discovered that didn't work). Certainly profit was the motivation behind management decisions, but I expect that (as a share holder).
All the old management (and remuneration committee) are now gone, and the new management are committed to Quality and Customer satisfaction.
Imho psn undervalued by over 15% in comparison to bdev and tw, simply because of the recent -ve press. This means they are great value now, as reflected by Margin (30% - 10% more than any other builder), Divis (Yield for me this year > 11%), Cash in hand (over £1 bn), while Eps (profit) still growing.
All builders undervalued by about 50% (cos of Brexit rubbish) but psn 66% cos of press, so true value about 3800 now. Don't know how long Sp will take to recover to that, but not bovvered with these Divis.
Bol wherever you invest, but Imho no better value than psn.

Hi Owls
Talking about FatCats and short term profit. BofE won't raise interest rates by much even in long term. No chance of supply catching up with demand in the foreseeable, so good times for builders will continue.
Nobody would lend me £1m anyway!
BoL

Hi Ben
Don't have any gfrd but on my watch list cos of move from Civils to Housing.
Trouble is I think it will take a long time for this to be reflected in accounts, so not looking to invest there at the moment.
Psn fantastic value now, Per not much over 8 in a company with 30% margin and over £1b cash.
BoL

Hi Ben and Bamps
A lot of -ve sentiment about psn at the moment which is more than reflected in the Sp. This has the advantage of making them better value. My av price 2069 which makes Divis very attractive, so quite happy to hold until review mid August.
Still think Builders are fantastic value now (just by Per's) so not looking anywhere else.
BoL

Hi Tom
Just think of the numbers. Borrow £1m @ 5% pa charged daily for number of days of the loan, and Buy 500 k shares @ 200. Say Divi is 11pps so pick up £55,000 Div. Sp goes up to 220 (20 * 11) then back down to 200 after XDivDt.
Sell 500k shares @ 200 = £1m and pay back loan (07/06/19) + about 30 / 365 * 0.05 * 1m interest.
You have made £55,000 less 30 / 365 in about 1 month.
Or if you hold until price returns to 220 you've made 55,000 (less interest) + 10% increase of borrowed amount = £100,000.
Don't expect 214 in mid May - that is the Date I want to buy before. Hoping for 214 just before XDivDt.
BoL