Member Info for TakingMyTime

Reasonably good update. Nothing there to justify the huge price drops in recent months. The market isn't great right now for steel / iron ore but the company is still performing reasonably. If this is what it is like in a tough market, it should go well when prices improve.

When you say Nano, do you mean Nanoco Group, Nanobiotix, Nordic Nanovector, Nano Dimension, Nano Labs, Nano One Materials, NanoFlex, or Nano String?

Hi, Nige, thanks for the tip on nano and ggp. Will try to make time to give them a look soon -- I do have some cash.

Hi, Nige. Exactly my point, I don't think a downturn will greatly impact demand because the housing shortage overrides that. But it will impact WHAT people buy.

In July TW reported private sales average price of £301K, total average price £261K. PSN's private sales average price (from their recent trading update) was £242K, total average price £216K. So PSN, on average, is making and selling cheaper houses than TW, and thus would probably see less impact of a downturn as buyers shift down the pricing ladder.

So no, I didn't mean £240K TW and £290K PSN. Private sales completions are the reverse of that, TW's prices are higher. And that means in a good economy TW would have an advantage relative to PSN, as people feel good about their ability to handle a more expensive home and shift up the price ladder. In a poorer economy, people tend to be nervous and shift down the price ladder, so some of TW's buyers would shift down into the PSN price range.

As to why TW/BDEV more affected by coronapanic than PSN, for various reasons (cash on hand, land bank makeup, average selling price), most investors would consider PSN to be better prepared to withstand a downturn. If times are tough the people who would spend £290K for a TW home might instead buy a £240K PSN home.

So when you have a panic over a few sick people in China (and so far that really is all it is, with full sympathy for those who have suffered and/or been bereaved), and people think it is going to cause a downturn, they are more likely to sell TW shares than PSN shares.

Basic economics -- if people have less money, they'll tend to buy more of the less expensive product. So if the market thinks people might have less money, they'll be happier to be invested in the providers of less expensive products.

Since I'm suspecting this panic is overblown, I'm becoming very tempted to decide that PSN is now overpriced relative to TW and to move some of my PSN holding into TW.

Trading update Thursday. At this point I expect it to have little effect. Share price right now is being driven by fear of the unknown future, and probably by some shorting activity. The trading update, on the other hand, is about what has happened in the last quarter/year, and will do nothing to reassure fears about coronavirus.

If the news on coronavirus improves, the price will go up, and a good update would reinforce that. If it doesn't improve, the price probably won't move much unless the update is bad (in which case it might drop further).

It's all about the virus and, secondarily, trade wars, for this share right now. For me, it's more about whether the company is still making money. If they are, I'll be happy whether they put it into dividends (cash for me now) or CAPEX (presumably more dividends later) or debt reduction (more scope for dividends later). So while I don't think the trading update is likely to overcome bad news on the virus front in the short term, it makes a difference for those of us willing to hold the share in the long term.

The buybacks are to counterbalance scrip dividends/dividend reinvestment, preventing share dilution.

@Nige "Did you look at my Plan? Just run a test system optimised for 2020 - still doing 20% better than Ltbh.
Strictly thinks too much guesswork. I think some decisions are quite obvious so I have 45% float in bdev prior to IntRes (05/02/20). Hoping for 5% inc there but could be wrong, even if I am it's not a disaster."

I'm with Strictly on this. Well, not really. You've been following the sector closely for a long time, you've got a feel for what is likely to happen, who's likely to have good results when and who isn't. I don't have that feel. So I'm more in the LTBH category. I think you are retired. I'm not. I don't have time to immerse myself in a sector that heavily. So maybe it isn't too much guesswork for you, but it would be for me.

As you know, I took the Boris bounce and cashed out a lot a few weeks ago. Should have stayed in a couple more weeks but I got out of a lot before the recent drop, I'm mainly in PSN, BP, and ABF right now, with a couple other things I'm playing around with for fun. Getting very tempted to get back in with the recent drop in the markets, I expect the panic to probably blow over soon and things to go again, so this may be a golden buying opportunity.

Right now, I'm still staying with PSN but I doubt I'll add to my PSN when I re-invest in builders (either this week or this summer).

So I guess you could consider this an admission that even though I say I'm LTBH, I do try to time the market sometimes, too. Made a really nice profit on the builders I bought back before the election, one of my better moves, even if I did take profits a little sooner than I needed to. Never time it perfectly.

One risk with your system is that all these shares are impacted by the wider market. We'll see huge moves because Xi and Trump sneezed at the same time, or because the smiles when they shook hands were bigger than people expected. Silly stuff sometimes. That's going to drive things sometimes far more than company results. But, your system does appeal to me if I really had the time to work it out for myself.

Strictly, I've been working in the investment industry for many years, and still am. I don't think I'm flattering myself to say I know a little bit about investment.

When it comes to this sector, though, I'm a babe in the woods compared to you guys. You guys have been following this for a long time.

I find CRST intriguing. Dividend is comparable to PSN but dividend cover is better, PE ratio better, cash on hand in percentage terms better, land bank larger in relative terms. Not trying to grow, though, and SE-focused which makes me nervous.

I bought into PSN because I was convinced the new mgmt team "gets it" as far as build quality / customer care, and also as far as the need to get out in front of bad news. So far, I'm happy with that, every piece of bad news in the last year, they've been able to say, "Yes, it's true, we're already addressing it." I expect the press coverage to start saying, "These are good guys, they've cleaned up the messes." It's already started. Once that gets rolling I expect to see another 15-25% on the SP, and will probably then shift to another builder, they'll be overpriced relative to the sector.

You think they are overpriced now. We're judging on different metrics. The right answer obviously has to factor all metrics in, as well as other non-fundamentals. Included in that, for you, is that you don't trust them. That's fair enough, and fair enough for you not to give the reasons in an open forum. Not really something I can factor into my thinking, though, without specifics.

I don't think any of these shares are losers. The whole sector is undervalued, still. I'm pretty sure of that.

The biggest difference in the PBV is the inventories -- even though PSN is significantly bigger, BWY's is higher. Why? If I were heavily focused on PBV as you are I'd want to understand those numbers before relying on them.

Thanks for the discussion, I've certainly learned some things. I suspect CRST is going to be high on my watchlist and I hadn't really given them much focus at all.

In general, Marcus is correct. The exception is if you don't own the share in a tax-efficient wrapper (ISA or SIPP). In that case, there is a difference in tax treatment between dividends and capital gains/losses. For instance, if you are taking a loss on the share, and you don't have gains to offset it, it would make more sense to sell before ex-div date, so that you don't have a taxable dividend.

None of that matters if you own it in an ISA or SIPP.

Hi, Nige. I think Strictly is not necessarily suggesting low rates are coming to an end. He's suggesting that the whole fiat money system is creaking and a collapse might not be twoo far in the future. If so, shares aren't the place to be. You want property, cash (though it might be heavily devalued), and gold or silver, if you are concerned about that possibility. And being debt free is probably a good idea as well, though no one knows what might happen -- your debt might end up inflated away to nothing. But there's a risk, in a total collapse, of major deflation which would increase the pain of any debts you have.

Anyway, I'd missed the comment about PSN's concrete blocks. Will want to chase that one down.

Why wouldn't we have a civil/courteous discussion? I tried to have one even with exstatex before I filtered him, if I can try to do that with him I can certainly do so with someone as knowledgeable as Strictly. Especially since the logic of his approach is very obvious. I can see what he's seeing -- I'm just not weighting it as heavily as he is. But it's possible that there are other factors I should be considering. No reason to throw money away on poor investment decisions because I wasn't willing to learn from someone!

@Strictly
I understand your focus on BV. And now, PE Ratio would also (marginally) point to Bellway as a better investment than PSN. But on the other hand, PSN is substantively better on the following metrics:
ROCE
Margin
I'd add gearing, as well. Both are low but PSN is very, very low.

Bellway is significantly more exposed to a downturn, IMO, on the following key points:
Greater exposure to the high-priced southeast, which makes them more vulnerable to falling house prices in a downturn
Significantly less cash
PSN's ratio of plots in their landbank to annual completions is substantively higher than BWY's, which means they have more scope to reduce land purchases in a downturn
PSN's higher margin means they are better equipped to handle falling house prices or increasing costs due to Brexit or other factors
PSN is also perhaps less vulnerable to supply disruptions due to their own brick and roofing tile works

Those are the reasons I've done exactly the opposite of you -- sold out of BWY entirely and remained heavily in PSN. To me, the factors I've cited outweigh the BV consideration, not because I think it is irrelevant but simply because I think other factors are more important in today's market. If there are other factors you think I'm overlooking I'd be glad to hear about them.

Due to fears coronavirus will zap demand from China. Could bounce back quickly if they get it under control.

More trade worries, too, but I'm guessing it is just posturing.

Multiple factors on the recent SP increases, I think.

1. Shares have been undervalued due to political fears, and political fears are receding somewhat.
2. Results coming in are in line with continued profitability and good dividends, and the results are simply causing people to look at these companies, and saying, "Hey, that's a good price."
3. Broker upgrades definitely a factor.
4. Lots of press articles on "shares to buy for the new year" running around, and builders got a lot of mention (somewhat like the broker upgrades).
5. Shares generally are up so not surprising these would be, too.
6. Lots of buzz around about UK shares being undervalued compared to US, I do think there's some international money coming in now that Corbyn and his like have been seen off for 5 years. There's still nervousness around Brexit but I suspect a lot of investors want to get in before then. Here's one example, note the comments on the UK near the bottom: https://www.bloomberg.com/features/how-to-invest-10k/
7. Lots of rumours about cuts to stamp duty which would presumably help builders.

So, I think you are partly right about the broker upgrades but it's just one of several things. The bottom line is these shares have been undervalued and there are various factors that are contributing to people waking up to that.

We're now well past my initial target when I got in, I'd targeted 2850 for PSN UNLESS we got either no-Brexit or Brexit with a deal. Since there's a Brexit deal that bumped my target to 3200, if we also get a reasonable trade deal I'm looking for at least 3500.

That's what I'd like to see, too, Gavster. Not sure we'll see much debt repayment but as long as the debt isn't increasing and CapEx is happening, that's going in the right direction.

Most brokers have had targets higher than the range we've been trading in. If we get a decent update we'll move towards those targets, and I'd guess they know that, so I'm expecting it to be bid up some up until the update. A good update will sustain that.

I think someone's been shorting this one pretty heavily and perhaps looking to close out some of those shorts before the update. I don't think prices of 350 were at all realistic.

In my view you got in at a fairly low point. Not saying we won't see 350 again, we might, but I suspect we'll also see over 500 and maybe quite a bit higher than that within your time frame. Meanwhile, the dividends should keep rolling in.

I'm not heavily into this share. Most of mine are rather more stable. Happy to play around with higher risk/reward for a small stake.

Considering how other retailers did over Christmas, I'll take it. The Primark approach to retail is still working. And sugar is recovering. Still pinning a lot of my hopes on the US expansion for this one.

Highest since the end of 2007.

When government withdraws RTB, people will still need houses. There will still be a housing shortage. Demand will still outstrip supply. The only thing that could change that would be if the economy tanks so badly that people literally don't have the money to buy houses. If that were to happen we'd see helicopters of money dropped on the problem so that the economy will recover (see, 2008-2009).

But I don't think that is likely. I expect the economy to still go along with low growth, and interest rates to stay low as a result, so people can get their mortgages and buy new houses. I expect the housing shortage to be portrayed in at least some of the media as a crisis about which govt MUST DO SOMETHING, and so when HTB goes away, something else will take its place.

I don't know what it will be. HTB was not really a success. The only thing that I'd say is likely to really drastically increase the supply of houses is direct incentives to the builders to increase production, and that's probably not politically palatable. So it will more likely be incentives for brownfield building, or something like that. It will be a direct incentive but dressed up as an environmental incentive, or something. An incentive to produce more of a certain type of house, or in a certain type of location. Maybe they'll designate 'enterprise zones' in the North and waive stamp duty on new build houses in those zones, or something like that.

There will be something because the press chooses a problem and decides that govt MUST ACT, and govt duly acts. Thus it has been ever since Thatcher, she's the last PM that had and wielded more power than the press. Blair had power but he won it by turning the country into a massive focus group and doing what it said so he couldn't stand against the press when they controlled his focus group.

I don't view it that way at all. The drop in revenue was expected due to delaying sales until closer to completion. It's a one time adjustment. The sales that were delayed will come through in the next year's results. The focus on build quality and customer satisfaction is not without cost but it hasn't crushed profitability and it had to be done. Customer satisfaction ratings are trending up.

So far Mr Market seems to be happy. I am. Looks pretty much like a 'steady as she goes' statement.

Cash on hand is lower than a year ago, it may mean a little lower dividends this year. That's ok, there's enough for a good dividend and I expect the demand to continue to be there, the houses to keep being built, the cash to keep coming in, and the dividends to keep rolling out. There's nothing here that changes my view of the company. Rather it reaffirms my view, that build quality and customer satisfaction matter and the company is actually taking substantive action to improve those things.