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You do talk some sh*te Steve.
Strictly,
Very informative post. My view is that CRST carries far less risk than PSN because it’s trading at such a discount to its book value. There is every chance PSN will cut the divi and the SP will tumble. There’s also every chance that inflation will see their costs increased/ROE decreased.
CRST divi has already been announced so no surprises to be had there. Being a smaller HB, with an mcap of c.500m CRST has more potential to expand/grow too.
Bottom line is that unless PSN can continue to provide a superior ROE in these market conditions, it’s SP will fall dramatically. CRST won’t.
Steve,
My question is why wouldn’t this drop to £6 a share? That would put in line with CRST in terms of price to book. You can’t value HB’s on profitability/divi when it’s not going to be what it was pre 2022.
I’m cautious on HB’s, but CRST is the one to have.
I have a bit of skin in the game, but not with PSN. CRST is far better value, current trading at about 0.6x book value, and still about 20% down for where it was a few weeks back.
I think this share has turned a corner now. Inflation coming down, we have the results next week which, if FGP is anything to go by, should boost the SP further too.
There’ll be no goodwill knocked off these results either.
Steve, I really don’t know where to start with that comment. Most people are on fixed rates, so they don’t want to lose it but buying a new build. When these fixed rates end, forced sales will flood the market and HB’s will struggle to compete.
It seems the market has baked in similar inflation figures to the US.
Better hope it materialises.
8% would be disastrous for UK markets when the US is 3%. It would show we have a real problem.
Think some more pain to come on Wednesday when the inflation data comes out.
It will be along similar lines to BDEV, but the market will act surprised and all HB’s go down again.
Don’t think it would’ve gone below £1 had it not been for the name change.
Folk don’t know what to make of it.
Still not worth the risk imo. We’re not out of the woods in the UK.
Hold on to your hats!
Stagecoach deal was 2021 when debt financing was much cheaper. You can’t compare oranges with apples.
Realistically all house builders will struggle to make a profit at the moment so you have to value them based on a percentage of book value. Land values have fallen since the accounts were produced so a 30% discount seems fair.
If you value them based on profits during better times, you may find yourself taking a haircut when these profits don’t materialise in the next results.
Anyone invested here has already lost money, it’s a question of how much more they’re prepared to lose…
What an absolute sh*t storm the housebuilders have and they decide to increase taxes on the sector right now? Rising costs, falling house prices, falling completions, rectifying the cladding, help to buy finished, mortgages being pulled, now increased corporation tax with another 4% tax thrown in for good measure!
What’s the point being entrepreneurial these days? All just goes in tax and then the gov wonders why we have no growth.
House prices won’t drop 30%.
They’ll probably drop 15% like the did in 2008. PSN dropped 85% in 2008 which would give us a £4 share price this time round.
Devtrad,
Regardless of investment amount, wouldn’t you agree it would be illogical to continue holding a share that he beleives will half in value?
Why not take the emotion out of it, sell and buy back when it does half? Surely that helps get the money back quicker/protects the capital?
Easy living,
If your sure these will half why not sell? It seems people are too stubborn to cut their losses and would rather go down fighting.