Member Info for strictlybricks

I just crunched this morning's numbers for Bellway…

Reality check EPS ~ by which I mean taking the progress of net tangible assets from the start to the end of the period, divided by the number of shares in issue, and adjusted for dividends paid during the period, came out at 93.7p, which was better than the declared EPS of 84.6p.

This gives a return on equity of 3.2% for the half year ~ so call that the equivalent of 6.4% for the full year though it may of course differ to some degree from that come the full time whistle...?

This does at least represent progress over last year’s ROE of 5.0% using the same method of calculation.

For the next two years, the scribblers have Bellway down for ROEs of 6.4% and 7.7%...

They’d had them down for an ROE of 5.6% this year….

So Bellway are at least doing a Ronseal, but clearly they’re having to grind it out ~ and we seem to me to be looking at being light years away from the recent past glory years coming up to 2020 when the ROE was in the 20%’s…

I have arguably been Bellway’s biggest fan in the past ~ they are the benchmark house builder share amongst our investing crew and not for nothing are they also known to us by the moniker “Ghostdog” for their long term seeming ability to glide through the years without any big hoo-hah and so without being particularly noticed yet having a long term track record that trumps the others…

But in recent times, my holding is down to just around 1% of portfolio ~ enough to keep me paying some sort of attention still, but without any angst about the slow progress that, it seems to me, may as I’ve said above make for it being many years before they return to anything like their former glory…?

If ever, now ~ given that we have Ange in charge of the game for the mo and who knows what the state of the nation will be in four or so years’ time…?

I can only live in hope, but, in the meantime, most of my money is now with the three big insurance boys…

Strictly

"As I type, LGEN is +3.26% against PHNX, AV. and MNG being -0.7% to -1.4% - that’s a 4%+ improvement on the market."

....................

Meco,

As it happened, I wasn’t paying attention to the market for the relevant last hour and a half or so of business yesterday….

So I hadn’t seen that, just at that point, the gap for return trip trade potential from M&G back to LGEN had opened sufficiently to have shifted around 20% of portfolio….

So, the plan had been to do that first thing today….

As is obvious, that was too late….. had I been on the ball yesterday afternoon, and bought the LGEN, that would no doubt all have been back in M&G before 10am, for a nice little round trip gain of, I would say, about 6% after allowing for costs and Rachel’s slice both ways…

Such is life ~ just have to wait for the next one… ☹

Strictly

"Sorry...but nothing is "permanent" with regards dividends or earnings...."

..........................

Poker,

I fully agree with what you have just said ~ however, I meant that the increase would reasonably be relative to what would have otherwise have been earnt or paid by a single share in any year, and obviously that figure can go down as well as up…

So, my apologies...

I didn’t specifically state that and I obviously wasn't clear enough in how I expressed my previous comment...

But the overall principle of what I’ve said still applies ~ just, perhaps, with the added caveat of “for better or for worse…!” 😊

Strictly

With regards to share buybacks, what they specifically do is reduce the number of shares across which any given level of net profit is allocated as earnings per share or distributed as dividends….

Providing this is done from surplus cashflow which cannot more profitably be re-invested in the business, this increases earnings per share ~ permanently ~ and which in turn, ceteris paribus, should sooner or later increase the share price….

So, that’s a permanent increase in earnings, and logically in due course, a permanent increase in dividends paid per share, rather than just a one-off happy moment with a one-off bigger dividend paid.

Furthermore, any pro rata (as opposed to market tumescent) share price increase resulting from the share buyback would be a rational one, based on Warren Buffett’s “the market’s long term weighing machine against its short term voting machine”, as opposed to a temporary blip up in share price due to a temporary change in demand for a company’s shares.

So, for example, a buyback of two percent of a company’s shares, other things being equal, should increase EPS by two percent and also provide for a two percent increase in dividend paid per share without costing the company anymore in total cash paid out….

So, while a company is engaged in a share buyback process, it is in its, and remaining shareholders’, interests that the spare price remains low…

As then the company, and its remaining shareholders, get more bang for their buck.

Nothing controversial here, I reckon ~ it’s all standard Warren Buffett stuff…

Strictly

PS I re-did the thread heading as I was fed up with seeing “dividend” spelt with a “t” at the end… 😊

“Your 5% "profit & hop it" system is one that I've never really considered as I'm a buy & hold em' sort of investor.”

…………………………….

Gary,

I infer from this that you consider our respective approaches to investing to be somewhat different….?

But maybe the difference isn’t so great as you might think…?

Being a “buy & hold” investor implies that you don’t try to call the market and that you also don’t try to call the value of your shares held against cash…?

And, neither do I…

But there is third way which is open to investors who pay attention ~ which I imagine that you do seeing as you are someone who contributes here and makes useful points so are clearly closely interested in what’s occurring….

And that is calling the value of one share against that of another in the same sector ~ which is what I do, & have done, for twenty years in the house builder sector and now with the insurance boys.

Allow that I am a wussy investor….

And one of my operating maxims is that I’m more fearful of being in cash when I should be in shares than I am the other way around ~ and that’s because, and this certainly applied when it came to the sensible house builders (rather than the nutters and the knaves of that sector), they have always come back in due course.

And, of course, share price is a matter of opinion rather than a matter of fact, and that opinion is changing every hour of every day that the market is open.

So, I might sell LGEN and buy MNG and then sell MNG on a relative rise to make a modest gain going back into LGEN once more…

And then the price might move against me such that, at that moment, I would have been better off staying in MNG.

But that’s only “in that moment”.

Because, as a matter of fact rather than just as a matter of opinion, I would own more LGEN shares than I did have at the start of that round trip transaction….

And so on, as and when the prices move once more in my favour….

Which, of course, they may not do…. but they always have done, in due course, sooner or later, for the past twenty years….

To do this successfully, you firstly necessarily have to be paying attention, and also have a spreadsheet set up to highlight the opportunities.

But it does work, and you don’t need to be an investing guru to be successful ~ because I’m certainly not one, but I have made this work over the long term for me.

Strictly

"....some might say now may be a good time for buying house builders shares while the prices appear to be rock bottom."

...........................................

Rob,

As you suggest, "some might say"...

But my view, as expressed here previously, is that ~ and taking Bellway given that it is my benchmark share ~ while their price to book value might seem to be in bargain basement territory, when weighed against both recent past and forecast near future performances, they are still, for me, too expensive.

In that they aren’t forecast to get back to single digit P/E until three years’ time ~ and, even then, only just….

As things stand, I prefer to wait and see if they are going to be able to return to their former high return on equity glory ~ at least insofar as the scribblers’ projections go….

That’s been an average of 16% a year over forty years in Bellway’s case.

Whereas their average return on equity currently being forecast for the next three years is only 7%.

And that’s only two thirds of the dividend yield alone that is being forecast for the insurance boys for the next three years.

The house builders may come back, or they may be coerced into much more by way of partnerships with government and big corporate build to rent investors, and suffer a loss of margin accordingly…?

Unless you buy the ongoing sales pitch from Greg over at Vistry…?

But, based on Vistry’s track record, that would be the triumph of hope over experience.

And then there’s that we’ve got the prospect of more than four more years of this government….

So, all things considered, I’m not holding my breath on it…

Are you…?

Strictly

“Hello strictly bricks, if you don't mind me saying, it seems a very strange time from you to have sold off your LGEN shares, I can only see this going in one direction between now and ex-div and that's up, therefore you will lose out on the growth and the dividend, I expect you have your reasons for doing so ?”

………………………

Rob,

You are correct in surmising that I have my reasons for doing so which I thought I’d adequately explained in my previous comment….?

As far as I’m concerned, the three high div insurance boys are all part of the same game for me ~ in that, like Lindisfarne (if you’re old enough to remember that band?), they all swing together…

More or less…. and it’s that which is the all important thing…

If you take a minute or so to make yourself a comparison graph of the three on the stock exchange graphing tool, this should be clear enough to see…?

https://www.londonstockexchange.com/stock/LGEN/legal-general-group-plc/company-page

This is essentially the same game for me and my investing crew as moving between Bellway and (mainly) Redrow previously (and other house builder shares from time to time, but mainly between those two) ~ except I have now switched sectors.

From the start of having reached an understanding in my learning the game that this was safe and do-able, up to the covid tsunami (when I fortunately took a big leap forward in comparison because I largely went to cash for that) my records showed that I was beating Bellway by an average of around 6% a year….

This might not seem much to any superstar investors reading this, but it did mean that over 10 years I’d doubled what I otherwise would have done sat scratching my bum just in Bellway or Redrow individually without trading between them ~ so it was very much worth the effort…

I might be, relatively, the new kid on the block when it comes to the insurance boys, but readily available comparison graphs show me that the same game has been possible for the insurance boys and I’ve switched sectors mainly because of the dismal profits forecast for builders for the house builders and also because those bar stewards over at Barratt have taken out Bellway’s playmate.

I appreciate that all this is unlikely to gain much traction with most folk here in these share chats but, honestly, I’m really not seeking validation from anyone for our strategy ~ and I’m not trying to give any sort of pitch here ~ as our game has worked well for donkey’s years for us, but I am also open to having a sensible discussion about it with people who are interested in doing so…

Strictly

"Strictly I thought you were giving some thought to taking a stake in RIO.

Hope it's not too windy up there on the moor, it is here up on the Quantocks."

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Gary,

Firstly, hello...!

You are right, and I did initially take around a 20% stake in RIO, but I cut that back, perhaps based on intuition, to around 5%...

And I've also got just a 1% token holding in Bellway, which is my benchmark house builder share, partly to try to ensure that I'm paying close enough attention for as, if and when it seems the right call would be to move back in a more substantial way ~ and I'm only imagining that happening if the insurance boys spike..?

And partly, the small Bellway holding is out of nostalgia... 😐

But that’s it for “others” ~ and the rest of my invested capital is across the three insurance boys.... well, at the moment, just two, as I've recently switched entirely out of LGEN and into the other two and am waiting for an opportunity to trade back....

Opportunity for me is defined as making a 5% or more round trip gain after charges... and the prices don’t seem to wobble round between the three by much more than that, so waiting for bigger gaps might be like waiting for Godot…? 😊

This strategy has served me & my investing crew well over many years in this malarkey, and the great thing is that, unlike many folk here seem to do, I don't have to give a monkey's about where share prices go overall, I'm only interested in even just modest gaps opening up between the different players....

So the market going up or down doesn't bovver me ~ except, as mentioned above, if it spikes for the insurance boys to bring the dividend yield significantly down, and that that coincides with improving prospects for the house builders according to the scribblers ~ I mean, over and above the growing but still poor returns on equity that they are forecasting as things stand.

Regarding the weather, you may well be right about Dartmoor right now, I don’t know, as I'm currently resting my bones out in Spain for seven weeks (in Javea, if you know it..?), and there's clear blue sky outside and I'm about to go out for a walk once I've finished typing this comment while waiting for my dear wife to be ready....

So, please don't fret too much on my behalf on that front....! 😊

Strictly

"Strictly, Monkey and Mr Math, thanks for your replies. What are your recommendations for RELIABLE high yield stocks in the UK. I'm getting various search results. I'm seriously considering moving in this direction. One thing holding me back is the capital loss over a year (LGEN -5.8%, MNG +1.14%, PHNX -1.27%); that would not be good if the trends continued! "

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Throne,

If you perhaps re-read my previous comment, I think that I have responded to those points you've mentioned above either directly in what I said, or implicitly in describing my investments held...

I don't do investment advice, but you can take where I'm invested as being the shares I'm happy to be in ~ albeit, as I suggested, my portfolio is way too narrow for most folks here...

Each to their own, though, and all that....

Strictly

Throne,

Just to give you a heads-up, I replied to your very similar post on the LGEN share chat...

Strictly

Throne,

'Why not invest my entire pension in high dividend yielders like LGEN, MNG AND PHNX?'

..........................

Having spent more than twenty years invested in house builder shares up to early 2024 ~ hence the moniker ~ I am now invested in just the very same three shares you've referenced, with virtually all of my investment capital, and for the same reasons...

A couple of things...

Firstly, the average yield across the three is around 10% not 9%, which is surely worth bearing in mind...

Secondly, if you go onto LGEN's website you can pick up details of their dividend payments going back twenty seven years...

If you make yourself up a graph of these amounts, there's something that becomes immediately very clear...

Go back to the event that was worse for investors than the covid tsunami ~ I'm referring to the credit crunch which was at its nadir at the end of 2008 (and reckoned to be the worst time for investors since the Wall Street Crash ~ so it really was a bad boy) ~ you can see that the amount of dividend paid per share fell significantly for the 2008 year and then a little further still for 2009.

But, and this is a big but, the dividend payment not only restarted its ascent after 2009, the rate of growth of the amounts paid until 2015 was accelerated such that the dividend amount per share got back to where it would have otherwise been, as of that year, had the credit crunch never happened….

There has been much weeping and gnashing of teeth in these share chats here for the three insurance boys….

But just imagine, for a moment, that you had put money into a business owned by a member of your family ~ one that didn’t have a stock market listing….

And that you’d put the money in around ten years ago in return for a 5% of capital invested dividend.

And every year, that dividend had grown, and you were now enjoying twice the dividend payment you were when you first invested without ever being asked to invest more capital…

Would you be concerned…?

The only difference with the situation we have with the insurance boys is that Mr Market is whispering in everyone’s lughole all day every day, and that some folks seem to be more perturbed by that that others…?

And, as for my seeming to have a very narrow spread of shares considering that it’s just across three, I would suggest that that represents real diversification by my standards as, when investing in house builder shares ~ when I was often moving around between different shares pursuing best perceived value ~ I would often have everything in just one share for periods of time…

This is certainly not a strategy I’m recommending to anyone else, mind ~ do your own research and all that fine stuff ~ but it has served me well over more than twenty years…

Strictly

For any Vistry sceptics amongst you, there is one metric by which their shares are STILL relatively expensive for the house builder sector...

And that is price to book value...

When weighed against Bellway ~ which has been my benchmark house builder share for many years ~ they have a PBV of 0.82 against Bellway’s more humble 0.74.

“Ah, but this is not comparing like with like..!”, I’m imagining some of you thinking…?

Indeed not…

Because, when you look at past performances, rather than puff & promises (in the case of Vistry, I mean, courtesy of Greg), then Vistry’s has been pants…

Average return on equity over the past twenty seven years when Vistry (aka Bovis at the time) arrived on the stock market has been 16% for Bellway and 10% for Vistry.

Bring Einstein’s “Eighth wonder of the world” ~ compounding interest ~ to bear, and you can see how huge the gap is….!

So, what would I pay for Vistry against Bellway…?

Well, I’m not sure I would be tempted at any price because I have enough trouble trying to get a good night’s sleep as it is, but it would have to be at a significantly lower PBV than for Bellway.

Vistry have been stuck on approximately the same book value per share for eleven years.

During that time, Bellway have nearly trebled theirs…

So, unless you’re a believer in the triumph of sales pitch over track record, which of the two shares would you prefer to own…?

Strictly

Fin,

Without wishing to wade too deeply into this debate, I think you may well be right….?

Back in the day ~ I mean, the Credit Crunch ~ the building sector was effectively left hung out to dry by the government of the day…

Instead of taking the opportunity to commit to the house builders to take up their surplus productive capacity, albeit at lower margins, for social housing and whatever, which would have kept the metaphorical wheels of the industry turning, instead, they did…

Nothing…

And while two of the big boys, Barratt and Taylor Wimps, nearly went belly up but were saved by serious rights issues, the rest protected themselves….

By, as you’ve suggested, cutting back ~ in fact pretty much halving ~ their businesses…

But that meant that brick kilns shut down ~ and you can’t just fire those up again like a wood burning stove ~ and that the Polish plumbers, the Estonian electricians, the Bulgarian brickies and the Slovakian site managers largely went home…

So that was inevitably going to take a few years to sort itself out ~ which is what happened…

So, fool me once, shame on you, fool me twice, shame on me, and all that, and the builders are better prepared this time (reminiscent, if you’re old enough, of the two miners’ strikes back in the day ~ the first one did for Ted but, second time around, it was very different with Maggie in charge because the country was better prepared).

I mean, the builders now have far less leverage than they did previously and they largely build to order rather than on spec…

So, if they do have to go into bunker mode with your pal Ange on their backs (I can tell you are a fan boy..! 😊 ), I suspect they will be somewhat lighter on their feet this time around…

I wonder to what extent the brainiacs in charge in the current government have researched all this and thought it through…?

Never-the-less, apart from a 1% of portfolio token holding in Bellway (which is partly out of sentimentality as that company’s shares have been so good to me for so long) I am all out of house builder shares and nearly all in the insurance boys ~ hence being pretty quiet on the house builder chats these days (though I do still read them).

Reason being is that they’ve had five years of headwinds when it comes to the bottom line, the scribblers are predicting at least another three more, and, whatever the share price does, the underlying forecast earnings mean, IMO, even these suppressed share prices still leave the house builders being somewhat relatively expensive (to the insurance boys, I mean)....

I may well prove to be wrong, of course but, in the meantime, I have voted with my feet….

Strictly

Johnjo,

If you can open this Telegraph article okay, I think it’s worth reading…

https://www.telegraph.co.uk/business/2024/12/21/angela-rayner-planning-overhaul-end-dream-home-ownership/

Melissa may be the Telegraph’s resident property-section doom monger, and she may not actually write many articles that I particularly agree with, but I think I’m with her on this one…

It seems to encapsulate some of my concerns and some of my reasoning for having abandoned investing in house builder shares as of early this year in favour of investing mainly in the insurance boys for the foreseeable despite spending the past two decades invested in pretty much no other sector but house builders…

Hence the moniker…

The thing is, though, I do think the house builders learned a few things in the credit crunch….

Don’t over-extend on borrowings, for a start…..

Barratt and Taylor Wimps had to learn that the hard way ~ as did I, having been heavily invested in Barratt at the time which resulted selling up and moving to a somewhat smaller property rather than sell shares at depressed prices…

Mind you, that has since worked out exceedingly well ~ so I ain’t complaining..! 😊

And don’t build speculatively ~ take firm orders AND deposits.

And herein lies the rub, in my view…

Builders are heavily criticized for their build rate, but they are mostly now building to order as far as I’m aware ~ and why shouldn’t they, given that they were left hung out to dry back in 2008…?

But this does mean that, like Melissa suggests in her article, when there ain’t much money around, there ain’t so many orders for houses, and ergo, surprise, surprise, there ain’t so many being built.

It’s surely hardly rocket science to follow…?

So, if private house sales are down, and not looking to substantially increase any time soon then, for any house building target to be met, it’s surely therefore got to come from social housing in its various forms, or from build to rent from corporate investment ~ given that governments of both flavours seem to be doing their level best to drive small landlords out of the market in droves…?

What’s next ~ rent controls…?

We could perhaps rely on the Swedish socialist economist Assar Lindbeck for where that one is likely to go…?

“In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”

It’s all potentially looking like a bit of a nightmare, isn’t it…?

And I feel like I’m in bunker mode about it all ~ even if living in God’s own country (I mean, in Devon… particularly appreciated being an ex-London boy….) is something of a bubble compared to life in the daily grind elsewhere…

Strictly

There is clearly a lot of upset around here today given the seriously disappointing trading update this morning and its impact on the market value of folks’ holdings…

And it seems to be coming out in a few narky comments here & there ~ on what is usually a fairly civilised share chat board…

I tend to take a somewhat more Buddhist approach to investing, even though I am not at all religious.

And applying that here means considering the nature of things…

And the nature of Vistry seems to have been that it over-promises and under-delivers…

And, in that, it has excelled this year.

Consider that, at the moment and as it just happens, Vistry is on the same PBV as Bellway, i.e. 0.81.

Some might say that this is comparing an apple with an orange.

Well, it is ~ if you are comparing track records…

And NOT in Vistry’s favour..!

Because Bellway has increased its book value more than threefold over the past twelve or so years while Vistry has done virtually diddly in that respect, so you might argue that Bellway should command a higher PBV…?

"Ah, but Vistry has its shiny recent “capital-lite” strategy now, which makes it more valuable, pound for pound, than Bellway…" I imagine some of you thinking...

Well, maybe ~ but how’s that going so far…?

And all this before the Labour government and its aspiration to build 1.5 million homes, much of it social and other rentable forms…

And, if it’s social, surely this means any house builder involved being in partnerships with government local or national….?

Which suggests to me that the builders would have let go of some of their control ~ including the margins they make for “the foreseeable…” (whatever that may be..?)

So, are Vistry worth a better PBV than Bellway…?

Or should they be more in Crest’s camp ~ another Vicky Pollard outfit if ever there was one…? 😊

Calling the bottom here seems risky…?

And calling the bottom stridently & confidently seems (while not wishing to be too controversial here…) rather wreckless…!

Strictly

“If, however, the company reinvests the dividends by using them to purchase additional shares on a shareholders behalf through a dividend reinvestment plan, DRIP, the company reinvests the shares automatically, without the shareholder having to do a thing or ever receiving the dividends physically themselves, that shareholder does not pay Income Tax on the reinvested dividends until they eventually sell the shares. At the point of selling the shares, Capital Gains Tax would apply on any increase in share value since the reinvestment occurred.”

………………..

Bots,

I found this particularly interesting as I am sitting on some capital losses from a couple of years back that I’d like to use up more quickly and which, based on the above, could potentially neutralise some dividend tax….

But I’ve just done some googling on this, and the comments & advice given from various quarters seem conflicted…?

So I would strongly suggest anyone similarly interested to check this out for themselves to be sure rather than make any pre-emptive decision on it…

A pity ~ as, for a short while, this was a rather interesting prospect which, like Zac, I had been completely unaware of previously… ☹

Strictly

It might be salutary to consider Vistry, as things seem to stand, with Crest from when they were in their pomp back in 2017…?

Back then, Crest were talking the talk, big-time, and the return on equity forecasts were comfortably above twenty percent for each of the coming three years at least…

And the market was clearly impressed ~ it took Crest’s PBV up to around 2.2 at the time whereas Bovis/Vistry was only on around a 1.2 PBV and Bellway was on around 1.6.

Scroll forward five years, and Crest proved to have been clearly talking out of their rear ends as their book value per share actually went backwards over that time reflecting the stark truth that their reality check earnings per share didn’t even cover the dividends between 2018 and 2023.

They now have a book value per share of 323p, as at my last reckoning, and a share price of 152p, putting them on a PBV of below 0.5.

Now, if Vistry were to suffer the same fate ~ and please, pretty please, do note that I am not making ANY prediction here I’m merely posing the thought ~ then, given their current BVPS of 600p, that would put them on a share price of below 300p.

Though if that seems a total negative fantasy to you ~ who am I to argue…?

But going back to Crest, their share price has fallen by more than three quarters from top to bottom, and, given that Vistry’s share price topped out just before covid at around 1,460p, a quarter of that would be 365p.

Which seems better than the 300p mooted above, perhaps..?

But then do also bear in mind that over a ten year time scale, Crest did at least manage to almost double their BVPS from 175p in 2013 to 323p in 2023 because their trading from 2013 to 2018 had gone well…

Whereas Vistry have achieved Sweet Fanny Adams in the whole of the ten year period in this respect ~ going from a BVPS of 604p in 2013 to 600p in 2023.

I may have taken some stick here, on occasion, in the past for being such a rear view mirror investor but, blo.dy hell, when it comes to Vistry’s windscreen, we’re all surely peering out into a real pea-souper ~ aren’t we…?

Strictly

Kyusho,

All of what you’ve said seems valid and I have no argument with it…

Hence why I wrote at the outset:

………………

“That really would be some rabbit hole to dive down, as you are looking to compare very different beasts…!”

………………

Because I had only been looking to compare Bellway & Bovis/Vistry and it was just that I was asked about Persimmon & Taylor Wimps.

And to bring dividends into the total picture for the two, Bellway started on a BVPS of 183p in 1987 up to 2,871p in 2023, so that’s 2,688p, plus total divs paid of 1,282p = a total gain per share of 3,970p.

Whereas, Bovis/Vistry started on a BVPS of 185p in 1987 up to 600p in 2023, so that’s 415p, plus total divs paid of 702p = a total gain per share of 1,117p.

So, not much more than a quarter of what Bellway’s achieved, then…

Whether or not that’s worth paying more pro rata on a PBV basis than Bellway depends, I suppose, on how much an investor buys into Greg’s spiel…?

Personally, I see it as jam tomorrow, and we know what tomorrow never does, and as such am avoiding Vistry ~ other than looking on in somewhat morbid fascination from the sidelines…

In twenty four years of managing my own investments I have made my fair share of expensive mistakes…

And if I’m to be wrong about Vistry, I’d rather it be that I missed out by not investing in them when I might reasonably have done than by being mugged by the sales pitch and taking a kicking on the share when, in my heart, I always felt I shouldn’t go there…

Strictly

“Really interesting post Strictly. What are your thoughts based on the same history and metrics for Persimmon and TW?”

……………..

GGG,

That really would be some rabbit hole to dive down, as you are looking to compare very different beasts…! 😊

Mind you, as it happens, back in 1997, when Bovis were foisted upon the market (a pejorative term, perhaps ~ but then I’m far from being a fan of Bovis/Vistry), all the book values per share were fairly similar…

BWY 183p

BVS 185p

PSN 190p

TW. 197p

Scroll forward to 2023, and you have:

BWY 2,871p

BVS 600p

PSN 1,018p

TW. 127p

It’s messy, though, because Persimmon paid out a shedload in divs ~ which clearly suited King Jeff’s bonus aspirations at the time. but at the expense of growth and a supercharged share price that inevitably plummeted later ~ so they have done better than just the BVPS growth implies.

And poor old Taylor Wimps, well, they had to do the mother of all rights issues back in the day ~ and you can see the grisly outcome in the above numbers.

Whereas my game was solely house builder shares for the past twenty years (hence the moniker) until earlier this year, I’m now completely out of them based on all the forecasts pointing to their low profitability of the past five years now continuing for the next three years at least (per the scribblers ~ calling the numbers myself is above my pay grade….).

And I’m now mostly invested in the three big insurance boys and a couple of FTSE100 miners….

I didn’t imagine that ever happening ~ but there you go..! 😊

And, until such time as that changes, in respect of the house builders, I’m only really paying attention to my benchmark share, Bellway, aka Ghost Dog…

As well as Vistry ~ but for me that’s essentially a popcorn job as I can’t begin to imagine investing in their shares ~ though, embarrassingly perhaps, I have previously owned their shares in my murky past while I was learning the game… ☹

Strictly

Those here holding Vistry shares might be finding themselves in the same dilemma as The Clash…?

I mean: “Should I stay or should I go..?”

Perhaps it comes down to what the Ghost of Christmas Future has to say as against the Ghost of Christmas Past…?

Let’s say that Greg (as in Fitzgerald) represents the Ghost of Christmas Future….?

His story is essentially that Vistry are heading for the sunny uplands of capital-lite house building, and would therefore no doubt assert that Vistry remain worth every penny & more of their current PBV of 1.11.

And, who knows ~ he may be right, after all…?

Whereas, let’s say that Jason (as in Honeyman ~ the boss at Bellway) represents the Ghost of Christmas Past…?

And he might point out that, over the past decade, Bellway have near trebled their book value per share whereas Vistry have only been treading water at best ~ and have actually gone a tad backwards in that respect…

This has also been the story of the track record of Bellway against Vistry/Bovis not just for the past ten years, but for the whole of the past twenty five years since Bovis first hit the stock market.

And Jason might also suggest that if Bellway are only currently worth a PBV of 0.85, then surely that’s the top end, at best, of what Vistry is worth by comparison, based on what has actually been achieved by the respective two companies…?

Unless you fully buy in to what Greg, the representative of the Ghost of Christmas Future is still saying, despite these holes that seem to now be appearing in the plot of the story…?

And for a current PBV of 0.85 for Vistry, by my reckoning, that would require a Vistry’s share price to slide further ~ to 510p.

Strictly