Member Info for steph

Total Equity April 2019 =618.57, 2018= 300.51, 2017 =150.69
Net Asset Value per Share April 2019 =515.95p, 2018=246.16p, 2017=109.84p

Maybe LSE is making a error. Why would a company growing it's asset base so quickly have a P/E of only 4.0 ? Why is earnings per share growing more slowly? I'm guessing but as no firm in the asset base pays dividends and profits are only booked on sales the two seemingly contradictory results make sense. Thus like TEF there is hidden value. GROW has simply chosen not to book profit by not selling off some of the growing value of firms in it's core holding.

I've penciled in July 24th to go to the GROW AGM. Hopefully some of you will have bought a share by then and will see you there.

I know I'm out of my comfort zone beyond the UK builders and outside of TEF in particular. I was quite settled in holding 100% TEF for 10 years or more and then diversifying later when I had more time to research.

I still don't feel I have the time to do your obviously beneficial hoping about within the builders. It still takes research time to do that. I'm more forming a position of a mix of builders I am likely to stick to for a few years. Bellway is a big part of that.

I'm not surprised GROW is growing slower on earnings per share and NAV per share than a quick look at the figures indicated. If something is too good to be true it generally is not true. Still GROW has good figures and they are steadily improving in their 3 year short traded lifetime. If they can just keep going on the performance so far they will reprice upwards. A P/E of 4.0 can't be forever. There is obviously enormous value in tech start ups as a sector. EU/UK underinvested compared to USA and China in the start up sector and lots of EU and UK top international Universities giving away free help. If not GROW it would be for me some other vehicle to get that exposure. It is the only sector I can imagine that can grow in earnings per share faster than 20% over a 10 year period.

I don't really understand under what conditions GROW can create new shares and I do need to find out to maintain the large position I have. If I really can't get a handle on it I'll need to trim even though the earnings per share growth is not shabby. It is just not compelling comparing it to the much larger and safer PCT.

Seems to me dilution (via chasing new money raised in large chunks at preferential buy in prices) rather than underlying performance is the biggest risk for investors in GROW. The bods running it, like TEF before them, have a vested interest in GROW growing even if at the expense of dilution that may never fully compensates existing share holders with more profit per share within a reasonable time frame. We got hit by that by TEF. TEF dilution hurt our SP's until the buy out occurred so we never got the promised benefit of the capital raised. GROW bods have more shares personally so maybe interests better aligned.

That said the combination of PCT and GROW is a good one. Between the two it perfectly exposes me to the global tech growth partially digital, AE, robotics, e commerce, etc. PCT the big global firms and GROW the little EU start ups. Top to bottom, Prague to LA.

GROW and PCT are the best I've found so far that meet my criteria to hold fast growing tech stock for 10 years or more. I'm not loyal to those two firms they are simply for the moment the best I can find in the sector to get that east-west top-bottom coverage. For now global high tech will form 50% of my portfolio and UK builders the other 50 (led by Bellway). The split between GROW and PCT is under constant review as I research further.

My excitement of the growth rate of GROW is a bit premature. Yes the company is growing very fast but they are also issuing more shares per year. Earnings and NAV growth per share is more moderate. Still above 20% but not as spectacular as it looked to my untrained eye.

https://www.investopedia.com/terms/p/pegratio.asp

1 is normal. Below 1 is good. above 1 be cautious.

0.2 almost unheard of. Means that market is pricing recent GROW profit growth as absolutely unsustainable going forward.

Of course GROW's profit growth can't keep up the pace of the last 2 years (nothing that good can last forever) but every indication they can meet their target with room to spare of 20% over a multi year period going forward. I've looked at previous guidance and management was always understated saying they will meet their 20% target when in fact it was 100% by year end. It is possible in the sector they are in.

As a TEF refugee (doubling EPS every 4 to 6 years I said) it has been hard to find something that might meet my same high expectations. Yes our builders will re-price upwards when political certainty returns but after that it will be 10% per annum combined divi and SP increases growth for the foreseeable future. Better than the FTSE but not life changing.

I really think GROW and PCT do better than that.

GROW has a P/E of 4.0 and a PEG of 0.2. They have doubled earnings and asset base per share each year for the last 2 years which is why the silly 0.2 PEG. I think the results have genuinely overrun past the SP. All broker recommendations at least 40% above current SP which helps. Our builder's broker recommended prices are more or less aligned.

Midterms this November 26th. If midterms confirm that this growth rate is continuing there must be a SP correction upwards.

I think GROW is just a forgotten performer in a risky sector that can grow very very fast. It is now my largest holding -even ahead of Bellway. Still young enough where I can put a significant % on capital growth hopes over immediate dividend income. Running out of time before retirement though so in a hurry.

downgraded PSN a bit and upgraded BWY, PCT and GROW.

Between PCT and Grow nearly half my ISA now in only 2 technology stocks. Big change for a 100% TEF refugee.

GROW risky but oh what potential. If I get rich in my isa it will likely be GROW related. Fantastic portfolio of ultra young tech companies right in the fastest growing sectors, 4.0 P/E and current broker recommendations 40% higher than current SP. Nothing in the builders to match that. Nothing to match that risk level either but hey ho good to have a bit of investment fun to create hope amongst the grim political news.

PCT has grown at about 25% quite steadily over a 4 year period and over it's 20 year history something nearly similar. If it can repeat the trick over the next 20 years I get my TEF substitute.

I am now expecting a Johnson majority and a Canada plus Brexit. Generally even on Brexit I expect Johnson with a 100 seat majority will pivot a bit to the center thus the "plus" on the Canada free trade deal. 5 years of Johnson a pain but I didn't mind him as Mayor and, expect for Brexit, I expect the same centrist please the crowds tendencies as PM.

He likes to be liked and is no ideologue. He will be picking up a lot of working class votes and needs to do one nation polices to appease them or it will be a one off transfer. Those working class votes are not big on the small state neoliberal tendencies of the ERG no the social conservative side of Mogg. I suspect Johnson rode the ERG to undermine May and be PM but with a large majority his loyalties will almost certainly be elsewhere.

Liked the fact he cancelled corporate rate cuts to fund NHS. Shows he is starting to get serious about governing. Easy to spray spending and tax cut premises about. Harder to signal there are trade offs. McDonald was doing that. Johnson is starting to do that. The lib dem surge is not happing. They don't seem to have a coherent policy package beyond Brexit. Jo is nicer than Johnson but not a visionary.

They say that pre 1989 communism scares the capitalist democracies to one nation polices. Now 2019 Labour is creating an anti austerity movement in the Tory party by trailing a lot of spending ideas that have political legs. So Corbyn can retire to his vegetable patch with a minor success under his belt after one failure after anouther. He did not even advance the Palestinian cause on his watch in spite of a strong personal commitment so inept and clumsy was he. To be fair even that minor anti austerity success was really McDonalds who tried hard to keep his radical polices costed and pro growth rather than merely redistributional bash the rich feel good stuff.

Labour party need to find a younger, smarter, more flexible leftie to lead them in the upcoming 2024 elections. One thing 100% for sure it won't be Jeremy Corbyn. Personally can't stand the man. He was given a once in a 2 generation opportunity to reshape Britain to be better, fairer nation and he ble

thanks, I might add to bellway. Still 10% divi PSN is really nice.

Becoming more and more pro GROW and PCT. Real prospects of 20%+ SP growth for both over a 10 year period of time. No divi though. PCT a more traditional stick picking fund in the global high tech envelope. Achieved 20%+ annual SP growth in the last 10 years and no reason why can not repeat that driven by disruptive innovation. In the short run our builders can (and probably will) beat that but in the long run I can't see how. Best play is probably to stay in builders until they re-price post Brexit and then pivot to technology stocks for the long run. Of course builders will always be good income stocks in a balanced portfolio.

Look at some of the companies GROW are into. Cool stuff. Real potential. Real risk as well.

https://draper-esprit.s3.amazonaws.com/production/uploads/document/file/36/Draper_Esprit_plc_Annual_Report_and_Accounts_FY2019.pdf

Wacky -I'll try to log in and do that when I get a chance.

Well I am now 40% completely independent of Brexit with PCT, GROW, CLIG, and SMT. Feel relieved and more willing to tolerate the UK politics driving our UK builder SP's. I expect my 60% builders will outperform the technology stocks for a couple of years but wanted a more balanced portfolio so I sleep better at night.

Thanks Cyb

Grow is 10% of my ISA right now and certainly a hold for now. Will not be adding nor selling for a few years now. To justify 10% it needs to beat 20% growth as I can nearly get that with Polar. They recently (2016) went public so not a long track record as traded but a long term stable team from before.

Of all my punts most nervous about GROW but most curious and most optimistic. I've always wanted to invest in tech start ups before they come to market and this is the best vehicle I can find to do so. Best chance to surprise on the upside. Also as GROW gets bigger and better known may re-price suddenly upwards. P/E of 4 is silly value if they really are able to grow from here. Just confidence needed. A P/E of 4 indicates the market thinks the current earnings is a bit of a one off.

For the life of me can't understand the P/E of Polar at 5.1. Must be a trick to it but never the less it is now nearly 15% of my ISA. Unless I can find something to spook me I'll keep 15% as a proportion for many years.

Well capitalized builders a steal right now. Seriously undervalued as if history will repeat itself in another recession. SO I'll keep 60% in UK Builders and have by a slight margin my largest holding in BWY and just behind PSN and Polar. Between the three of them they are 50% of my portfolio.

YEs but, holy cow, GROW selling assets to generate a P/E of 4 is pretty amazing even if NAV is exaggerated by an overvaluation of the underlying assets. I am assuming of course they can't book earnings unless they sell something. Can't in accounting world to my inexpert knowledge be a theoretical profit.

Theoretical NAV of course for reasons you mention yes (with over 100% cover of sp which leaves some room for minor overvaluations). Theoretical value of assets which is why most UK builders showed losses in 2009-10. It was writing down a theoretical land asset value rather than losses on the throughput of homes they were actually building. So builders earnings even more volatile in relation to writing down an asset base as GROW or Polar whose booked profits are not direct affected by asset base decreases.

Polar Capital gets a P/E of 5.1 even though it has positions well balanced across the world of the largest technology companies. If the same accounting principals for GROW apply it can't book earnings from rises in it's stakes. Must come from dividends or sales. So if the tec sector tanks for a couple of years it will have a dive in earnings (less profit booked on any sales) and NAV but dividends will keep coming in. I can't see the risk that justifies a P/E of 5.1. Yes it is a slightly leveraged bet (stock picking not stock index linked) on global tech stocks to be sure but is the business model really riskier than holding the tech stocks themselves or holding a tech index tracker?

Seems to me Polar is a lot bigger, more liquid and more secure for a minor difference in P/E. SO GROW should never be a large percentage of my portfolio. But hey what fun to still be a significant part. Just love getting into UK and EU tech start ups before they hit the exchange. High risk but real potential to rise faster than the tech index and even Polar. That said if one looks at history and not hope GROW has not performed as steadily or as well as Polar in the last 5 years. That can be a buy signal (it is just temporarily undervalued due to sentiment) or maybe a signal of underling problems to the investment model. I need to research further.

This is all new stuff for me but it is a significant part of my pension strategy so worth the time to get it right. I don't mind as I did for TEF to take risk to get a good 10 year return within my ISA. I can diversify later into income generating stock. Right now I am willing to have up to half my portfolio high risk and high growth. I think our UK builders will have a bounce when Brexit uncertainty finally lifts but not convinced the ones I have can grow beyond 2. 5x dividend reinvestment included over 10 years. The tech ones certainly can. 4x, even 6x over that time frame are will within the range. I am not gambling on tiny oil exploration companies here based on some rumour I heard in a pub. Polar actually achieved that in the last 10 years on a pretty smooth looking curve.

I have in descending order of size 9 main holdings now. The weighting is about 2/3rds UK builders and the other 1/3rd global tech stock and tech start ups.

BWY
PSN
GROW
PCT
RDW
CLIG
SMT
BKG

I have used trusts that stock pick to hold in the alternative sectors rather than indexes or individual shares. Historically these have outperformed the tech index benchmark (which itself was not too shabby at around 4x over 10 years).

My thesis is that cloud computing, logistics, robotics and communication disruptive technologies have only started to run their course and a global diversified portfolio will over the next 10 years yield growth of TEF pace (doubling every 5 years). It is also UK Brexit drama free investment. Getting a bit tired of it all and we have years of Brexit uncertainty if Boris wins as, after an initial honeymoon, he is bound to start threatening crashing out again if he does not get his way on the free trade deal that normally takes 7 years to negotiate and he claims he won't extend the transition period. It just goes on and on. TESLA just announced a Brexit related decision not to produce in UK.

I am thinking of further diversifying by stock picking within the global chemicals sector (especially middle and far east) as I know that sector almost as well as TEF's residential patch. Pretty amazing new stuff coming out in the engineered plastics and good sector growth as plastic replaces metals for a growing number of applications.

It has been a pain for me to get bombed out of TEF but I hope by spicing up my still substantial UK builder portfolio with fast growing tech stock and tech start ups I can still get the pace I thought I had. Like TEF I am taken a 10 year plus view and can ride out a modest recession and still hope for 4x SP growth over 10 years within the non builder bit and 2 to 3 x for the builders -dividend reinvestment included. Not hard to imagine if PSN can maintain divis at 10%. Does not need SP growth to get 2.5x.

https://www.polarcapitaltechnologytrust.co.uk/annual_report_2019/

https://www.investorschronicle.co.uk/tips-ideas/2019/06/05/draper-esprit-portfolio-doubles/

can anyone speculate why structurally PCT and GROW have such juicy P/E ratios of 4 to 5? This is even better than our UK builders. who range from 6 to 9.
Seems to my inexperienced TEF oriented mind a buy signal. Both invest in tech sector with GROW exclusively in start ups.

I think I have with GROW, PCT, CLIG and a bit of SMT a UK builder counterbalancing exposure to global tech including a fair weighting to tech start ups (the most risky but with the most upside. CLIG interesting as they pay a UK builder style dividend. The rest no significant dividend but capital growth potential (and history) of doubling every 5 years -my old TEF target.

I'm continuing a slow diversification such that UK builders are down to 2/3rds of my portfolio with Bellway the largest within that (in deference to Strictly) and Persimmon the second (10% dividends). So far Persimmon has been the star performer.

Outside I go far away from UK builders with GROW, CLIG and SMT. CLig global with an emerging markets specialization and a UK builder sized dividend. NIce combo. I may buy more. GROW no dividend and a specialization in EU tech start ups with a massive P/E ratio that only small start ups can generate. GROW can easily go up 5x over the next 10 to 15 years. A trick no UK builder (except the now privatized TEF) can aspire to.

SMT a more traditional tech stock consolidator with shares in Tesla , Amazon and the like. I could do those tech stocks individually but don't mind the fees to have someone do a portfolio for me. Poor dividend but an interesting 8.5 P/E ratio given such exposure to large tech stocks. So essentially leveraged I suppose in my inexpert assumption.

I'm expecting a Boris majority government. With that I expect an orderly hard Brexit and a Canada style free trade agreement with maybe some sectors closer than that as traditional UK business lobby kicks in. Might be a surprise on the upside for business and financial services but that only benefits London and thus only marginally for the builders I hold.

This is disappointing on a personal level but December 13th should see our SP's rise a bit in the UK builders sector.

There is a chance of a hung parliament of course. After a bit of volatility probably good for UK builders shares as we get a mild Brexit or no Brexit combined with a Labour minority government with polices aligned with the LIb dems and SNP so no hard left soak the rich stuff to worry about.

I can't see any way Labor can get a majority so the soak the rich policies that would hurt our SP's will not see the light of day. Good for my investments but on a personal level a bit disappointing. I don't mind being soaked by a competent left wing government achieving real efficient and tangible improvements for the many by soaking me. Key operative word is competent. Can't stand Corbyn (basically stubborn and stupid) but have time for McDonald (smart and strategic).

The Lib Dem surge would have started by now if they were to make a real breakthrough this election. I expect they will clock in in the upper teens. Enough for 30 or 40 seats with tactical voting going on but not enough to change the basic composition of Parliament. SNP will do well and we may well see an independent Scotland in the EU leading to a hard border between Scotland and Britain. So the Conservative and Union Party will have caused the break up of the Union.

I expect the Brexit party and UKIP will do badly and win no seats. Once they loose their EU Parliament seats on EU exit in January they will not get as much air time and should thankfully fade into irrelevance. I

I suppose this is positive for our shares although much now priced in.

If Boris win a majority we will get his fairly hard but orderly Brexit. That is not the worst of the scenarios that were very possible only a month ago. Thus the rise in the sector.

If Boris falls 20 seats short of a majority we probably get anouther referendum with no Brexit at all the likely outcome. That would be very good for shares.

If in the unlikey case Labour wins a clear majority we get a second referendum and no brexit but we also get a bunch of economic policies that will probably drive our SP down.

Thanks

Hard to understand their portfolio but best non Uk builder stock I can find that meets my 3 objectives

Diversify out a bit of Uk builders
Get same divi as Uk builders
Have at least some sp growth trend

https://www.citlon.com/investor-relations/investor-reports/CoL2019AR.pdf

This gives the same 6.5% dividend and part of the potential for growth as our UK housebuilding sector yet is completely different.

Can anybody say why this is not a good share to blend with investment in our builders for diversification purposes. I really don't know enough about this sector to invest more than 7% of my ISA. The rest is UK builders and so far this year the builders side has done quite well in a difficult unpredictable market.

no deal odds have dropped considerably which is why our sector has risen. Currently no deal trading at 12% on betting sites which probably overstates the risk.
That said our 15% sector rise on the drop of risk for no deal is not the rise we would get if a clear pathway suddenly opened up to no brexit at all such as the deal being subject to referendum. It is within the gift of the opposition parties to achieve this if they could only work together.

IN spite of the rise I am still not in any cash. I think it can go further even though the sector is starting to outrun the very political broker guidance. McDonald trying to grab control of the frozen party machinery to allow this agility. I wish him good luck.

Corbyn and his advisors are obstacles to any sensible outcome. A Labour Brexit would be a electoral disaster for Labour and any referendum between a labour brexit and no brexit would be considered a sham by 30% or so of the population and thus not resolve the issue and give the nation much needed stability.

A referendum between a pretty hard Canada minus Boris Brexit and remain is a real and radical choice for the nation. Plenty of blue water between the two options. Farange might claim any orderly Brexit is a sham but he would not have much traction on that line. Just look like the wrecker he is.

That would be a real choice for the nation and those who want a full Brexit would need to campaign and vote for it. Even a strong remainer like me would feel comfortable with a Boris Brexit if he won such a vote. I don't agree with everything the nation votes for (I was never a Thatcher supporter) but it is still my nation. I feel that the nation did not vote for a Canada minus Brexit in 2016. They were promised an unavailable Unicorn Brexit.

A real Brexit option needs to be publically tested to be sustainable. Anything else will lead to endless debate, uncertainty and even reversal.

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In partnership with NHBC / An HBF Company
Strong momentum and progress at Inland
Inland Homes has issued a trading statement in respect of the 15 months ending September 30 showing a 313% rise in partnership housing equivalent units to 339 (June 30 2018: 82) and a 53% fall in private housing completions to 130 (June 30 2018: 275). Revenue stayed steady at £151 million.
The firm said: “Significant progress has been made in the period with strong momentum across the group’s operations and trading in the period has been in line with the directors’ expectations.”
Inland saw an expected fall in private housing completions to 130 (2018: 275) “due to the number of large-scale apartment developments under construction where occupations can only be achieved on handover of completed blocks. We currently have 889 private homes and 578 partnership housing equivalents under construction, which provides an indication of the current scale of our development programme. We have begun discussions with a number of build to rent operators and expect to enter into this market which will reduce our headline gearing and generate new capital to reinvest in our business.”
Inland’s average selling price was £250,000 with an average sales rate per active site over the past nine months of 0.71 homes per week. The current forward order book for private sale stands at £28.3 million.
Inland’s partnership housing equivalent units have increased by 313% as the firm has increased penetration into that marketplace. A recent partnership housing contract worth £5.4 million was secured for Watford Community Housing Trust for 45 homes. “We expect to secure further significant contracts during the new financial year,” said Inland.
The firm has secured planning consent on its “flagship” 100 acre Wilton Park site in Beaconsfield, Buckinghamshire and secured consent for a new urban village of 1,725 homes next to the station in Cheshunt, Hertfordshire.
Stephen Wicks, Inland group ceo, said: “We have maintained our significant growth trajectory whilst investing heavily in high quality staff and systems, at the same time as improving build quality and increasing satisfaction with both customers and partners. The business is performing well at all levels and we are laying the foundations for significant future growth. With the benefit of our new planning permissions and the momentum that has been achieved, we are now well set to increase the scale and breadth of the business.”
Read this article on our website Click here

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could not see the reason for the Bellway dip. I suppose expectations rather than results. Might creep back up over the next few days.

Agree with all of your analysis strictly. The different builders offer different plusses and minuses. Only Tef for me had a compelling case to be 100% concentrated.

I have a large Bellway holding in spite of a low dividend due to an expectation they will do better than the others in a downturn. I have a lot of crest and some persimmon for the opposite reasons. High dividends now. Builders were all moving in lockstep up to todays drop for Bellway.

Since I came out of TEF I have bought the following and had the following rises (excluding dividends) in order of the size of my holding:
1) Crest, +11.2%
2) Bellway +9.6%
3) Redrow +7.5%
4) Persimmon+17.65%
5) INland +16.4%
6) City of London Investment Group -3.5%
7) Berkeley+13.0%

City of London is a pure contrarian play and should move independently to UK builders or even a UK recession. Divi of 6.5% and growth potential. P/E of 12 which is not a bad buy in point for a non builder with a big dividend. Very wide spread so need to plan to hold for a long time.