Member Info for Nige_W

Hi DC2007
Don't think you need to worry about much further decline in prices. Even Liberum has said No Deal Brexit already built into price. The market believes an economic downturn will hit builders hard (cos historically it has done), but what hits builders hard is a large increase in Interest rates (or banking crisis), which isn't going to happen.
Builders current success is due to supply being far less than demand (despite recession, austerity and Brexit) which is why Eps, margins, divis and cash, have been increasing for the last 10 years, and this situation is not going to change any time soon.
This is why Brokers and Builders predict continued growth, while the market believes Brexit could lead to a 50% reduction of Eps. I calc current Per at 7.3 (trad 14.0) which means if No Brexit Sp should be almost double what it is now. Even if No Deal Brexit this won't change supply / demand situation much (say 5%) so Sp should still be around twice what it is now.
No idea where the bottom is, but assuming market is already wrong there is no way of knowing how much more it can be wrong!
Doesn't matter if Sp goes down to 1000 if you don't sell - then yield 26%, less than 4 years to get money back and psn doesn't need to earn a penny in that time when £1.3 Bn in kitty (exaggerating a bit!)
BoL

Ps
Notice following year you need 950 + 400 = 1350 houses so situation getting even better for builders!
Eps increasing by 10% pa despite downturn (and not decreasing by 26 to 35%!)
Of course this is an example using round numbers, but I think a valid point.
Think 2nd ref inevitable now and if Remain In Sp on the way to 1000 (quite quickly I hope - maybe 3 months after ref).
BoL

Hi JK
My point is bldrs profitability is dependant on supply / demand and as long as supply less than demand bldrs will thrive as they have done for last 10 years, despite recession, austerity and Brexit.
After 10 years of growing eps, margins, divis and cash there is no sector with such great fundamentals. Unlike 10 years ago bldrs are well prepared for any disaster (not that any on the horizon). Even if the Borg invade bldrs have the cash to stop building and wait for them to leave - then business as usual -ish?
What is ridiculous is their Per's which are half or less than pre Brexit Per's, inferring if No Brexit prices will double.
Even if No Deal Brexit I think builders Sp should lose no more than 5% of No Brexit price, so more or less double current Sp. Brokers (even Liberum) and builders agree on this, so a completely different view to the market.
Imho the market is wrong again (and never been so wrong before!)
BoL

Hi JK
How does this effect the shortage of houses?
BoL

Hi Troubles
Can't remember what I said about CoLB. My Great G G Grandfather (Corporal of Horse) lost his life there, on the train to Scutari hospital. He never got there (died on the way and thrown off train). Walking wounded followed the track to the hospital, stripped the dead of boots and clothes (cos very cold) later started burning the bodies to keep warm, then started eating the corpses.
Good post on nano, have you noticed Sp never goes below 41? (Nigwit reckons that is cos of Loam - own over 20% now).
I sent one on bdev concerning 5% decrease in Bldrs value (not 50%). See also MarkB message stating that odds of 2nd Ref decreased from 5 to 1 to 5 to 2 Think Reuters report from a Broker.
XMas for me - Apple revealed as partner at Agm, and Brexit with No Deal rejected, so TM revokes article 50 and we Remain In. Maybe not too many leagues to go onwards
Then we all live happily ever after. BoL

Hi Troubles
Well found and if production starting soon, shirley the mystery partner will reveal itself shorty- Agm?
BoL

Hi Mark
Posted this on tw
"Huge rise in bldrs today proves that low valuation due to perceived economic downturn caused by Brexit.
This is a misconception anyway, downturn does not affect builders. Big Increase in Interest rates or Banking crisis do - neither of which are going to happen (and they cause the downturn).
Imho Brexit with No Deal could justify a decrease in Bldrs by up to 5% from Remain In justifiable price of 294 = 279.
Just price from Per (last Friday) = 134 * 14 / 6.4 = 294"
26 to 35% decrease in Eps?
Say country needs 1000 new homes every year but only 500 are built. Then No deal Brexit agreed and demand decreases to 950, and you build all you can 550 (increasing Eps by 10%)
Ie You are still increasing Eps even though demand decreasing.
Business is driven by Supply / Demand!
Like No Brexit up to 40% - only going to increase hopefully.
BoL

Hi Troubles
Huge rise in bldrs today proves that low valuation due to percoeived economic downturn caused by Brexit.
This is a misconception anyway, downturn does not affect builders. Big Increase in Interest rates or Banking cisis do - neither of which are going to happen (and they cause the downturn).
Imho Brexit with No Deal could justify a decrease in Bldrs by up to 5% from Remain In justifiable price of 294 = 279.
Just price from Per (last Friday) = 134 * 14 / 6.4 = 294
BoL

Hi Mark
Good job I didn't sell yesterday. Who could have guessed this rise today, Just shows how difficult it is to get the timing right! Surprised how quickly the market reacted and still a long way to go.
Like your valuation 928 - very close to my Per method (last Friday) 462 * 14 / 6.9 = 937
BoL

Hi graham
You could be right, but how this effects shortage of houses is beyond me.
BoL

Hi FarmerT
I am fine and hope you're fine as well.
Definitely opportunities for builders - just need to get timing right which is easier said than done! Congrats on your excellent timing.
Fwiw my system is telling me to buy psn, bdev and rdw right now - thinking about selling some shares tomorrow and buying the others after vote - but who knows?
BoL

Thanks Mark
Ideally TM Brexit defeated then 2nd vote (why?) defeated then Ref - Remain In or Brexit with No Deal, & Remain In.
Even better TM loses vote and since No Deal, revokes article 50 (cos EU said no more negotiations).
Anything else is a disaster (to greater or lesser extent), though if existing plan goes thru maybe a small increase in Sp.
BoL

Hi Mark
Hope you are right about referendum - why no polls? Can't see Brexit deal going thru Parliament but again no polls.
About to adjust float in builders so could sell now and buy back after Govt vote (assuming TM plan rejected and builders Sp falls again).
Can't even find odds on betting sites. Can anyone help?
BoL

Hi Troubles
The Captain blames all difficulties on everyone else, or if enlightened, would not let the issues manifest themselves.
Still hoping for referendum and No Brexit. We must be able to choose between No Deal Brexit and Remain In. No other possibility exists cos EU has said no more negotiations.
I hope last act of TM is to call the Ref, or say we are not leaving without a Deal so no Vote and we Remain In.
Interesting that there are very few polls published. BBC likes to ask disadvantaged people, small businesses and Schoolgirls - which is Good News?
Earlier BBC had schoolgirls talking about the effects of Global warming (little on the conference in Poland and Sir DA). Toxic mix of brainwashing by the Media..
Doldrums? I think things will start moving quickly now - but who knows where?
BoL

Hi Toonman
The companies you name are Construction, House Builders are in Household Goods, and accounts are chalk and cheese - just look at margin and cash held. Why would you want to borrow from Banks when you hold £1.3 Bn.
I am increasing investment in Psn for Divis > 13% and if Remain In vote Sp should almost double - could miss the bottom but am I bovvered?
BoL

Hi Mark
Easy to see (from Per's) that if Remain In all Bldrs should double in price - can't see much change in Sp for any other options - maybe another dip. Whatever happens it doesn't change the shortage of houses (hence profitability of builders).
BoL

Hi kingrav
You could be right but Eps then were 182.5, now 266.3. Don't record daily prices but low was 1420 We 08/07/16.
BoL

Hi Bamps
Normally I buy Divi at least 2 weeks before XDivDt then if Pre XDivDt surge I can sell some, or if I hold for Divi probably need to wait a week or two for Sp to recover. All in the air now cos of Brexit.
BoL

Hi Bamps
The reason my system says buy psn, rdw and bdev is that these 3 companies perform best in the first few months of the year - but who can say now? Decided to sell bwy float and buy psn and rdw before Feb.
System plan tells me what to do until the end of 2019 but you only need to hold shares for 1 day to pick up Divi, so a bit of flexibility.
BoL

Hi Tom
Not selling any builders (as I said might buy some more using Credit) cos not prepared to risk selling and hoping to buy back at a lower price. System is telling me to buy psn, bdev and rdw - already have float in bdev, a little in rdw.
2 Divis on the way from psn Int XDivDt 07/03/19 125 pps and 13/06/19 FinDiv this year 110 pps (no doubt 125+ next Yr), Total 250, Sp 1900 = 13.2% Yield. Don't mind selling some Bldrs stock to get those Divis.
According to system Relative price (05/01/18 = 100) bdev now 70.2, tw 63.5, psn 68.4, rdw 70.6 and bwy 69.0,
Bwy just gone XDivDt (3.7%) and has decreased no more than others so will move float from there to psn.
Sp driven by politics now (not company performance - bwy should have lost 3.7% more than others), so might as well go for Divis.
KTF, all will recover - just a matter of time and politics
Raining here as well - BoL