A possible PYAD share?

[cshfool2]

I agree with you bulldog, but it may or may not happen hard to say. Let's not forget there is a structural shortage of about 3m houses in UK and barring a massive cooncil hoose building program to match the post war boom, or drying up of finance as per 08/09 that gap will be hard to deal with. Anyway I expect stable/declining revenues for a while and happy to hold till better times. If I can get a 40% margin of safety or more over tangible book value for a further 20%+ drop in share price then that wouldn't be too bad.

csh

[Charlottesquare]

The yields on some builders shares looks enticing. But I've a feeling it's going to look more enticing yet via share prices falling back. And the yields are getting to the point that with likely falling revenues for a couple of years, the companies will be looking to cut the dividend.

If I could time the market I would be very rich.

I hold both Bellway and Springfield, Bellway I am 12.93% down buying at 2441 in July 22, Springfield am 4.28% down buying in Oct 22 at 85.88 and Feb 23 at 81.37.

I still think longer term they will come good (both are I think decent companies) but certainly my timing was poor.

I am not aware of anything wrong with the companies beyond difficulties with the markets in which they operate (mainly banking/affordability)

We know that when spanners get thrown into the banking machine it can stall, certainly this appears to be what has happened with first time buyers, we also know that like a boxer taking one on the chin banking tends to shake its heads and then gets going again. A contact who builds last year told me mortgages were an issue, they were stopping marketing on one site and going to rent the finished units instead, saw him a few weeks back and sales are happening albeit much slower than before, I think there are signs the banking machine might be safe from the canvas and whilst punch drunk is still standing.

I did not buy much of either so expect I may add a few more of each with current weakness as dividends/pension contributions give me liquidity (or if I sell all/part of something else)

Not sure re divi cuts and pricing falls, both may value their share price for further acquisitions too much to trash them.

I look at my SIPP as something I will take slowly from 2026 onward and I can select what I sell and when, as I want to have withdrawn all of it by 2035 (age 75) I have hopefully a fairly long horizon as to when I will be pushed into selling these holdings and strongly suspect by the time I do I will be back in profit.

[BullDog]

Thanks for the comments. I think it's fair to say that with net migration into the UK heading towards a million per year and housing completion running way below that, there's a floor to the market. I think I'll buy into housing but not just yet.

To add, I have a wedge of Morgan Sindall, not quite the same as Bellway, Taylor Wimpey, Redrow etc... but they do have a house division.

[murraypaul]

Bellway is carrying £147m in debt, of which £144 is not due in less than 5 years.

And yet is planning to spend £100m on share buybacks.

I find it hard to see how any director could consider it in the company's interest to spend that much borrowed money on something that doesn't improve the company's performance in any way.

[Charlottesquare]

Bellway is carrying £147m in debt, of which £144 is not due in less than 5 years.

And yet is planning to spend £100m on share buybacks.

I find it hard to see how any director could consider it in the company's interest to spend that much borrowed money on something that doesn't improve the company's performance in any way.

A comparison of the cost of £1 of debt and the cost of £1 capital may be in their thought process, maybe the debt is cheaper (for now). I am with you, clearing debt would be more of a priority for me, but probably that is why I am not the FD of a listed company, merely FD of a private one.

[pyad]

I posted early this year on what I saw as an attractive value play, almost a pyad share, Harbour Energy:

viewtopic.php?f=8&t=15320#p570726

I bought a chunk but it's been trading since then well below my 300p purchase price. It is often the case with value shares that they can take a long time to out and thus require great patience, though it has paid a decent yield whilst I'm waiting which is one of my value investing criteria.

A relatively massive and transformational deal was announced today that has propelled a big price jump to about 310p.

https://www.investegate.co.uk/announcem ... o-/7957173

I continue to hold.

Incidentally I posted here as there doesn't appear to be a Value Board on this site, though I may perhaps have overlooked it as I don't write here much. What a change from the old TMF where the Value Board used to be hugely popular at one time.

[MDW1954]

Incidentally I posted here as there doesn't appear to be a Value Board on this site, though I may perhaps have overlooked it as I don't write here much. What a change from the old TMF where the Value Board used to be hugely popular at one time.

Moderator Message:
Would people like a Value Board? I can certainly put a case forward. --MDW1954

[dealtn]

Incidentally I posted here as there doesn't appear to be a Value Board on this site, though I may perhaps have overlooked it as I don't write here much. What a change from the old TMF where the Value Board used to be hugely popular at one time.

Moderator Message:
Would people like a Value Board? I can certainly put a case forward. --MDW1954

Sounds good. Although I rarely post myself anymore.

[MDW1954]

Moderator Message:
Would people like a Value Board? I can certainly put a case forward. --MDW1954

Sounds good. Although I rarely post myself anymore.

You've posted 48 times in December...

MDW1954

[cshfool2]

Moderator Message:
Would people like a Value Board? I can certainly put a case forward. --MDW1954

Go on then, put the case, we shall all have great expectations. Abundant thanks.

Good to see pyad's input and update on value play HBR too.

Since I posted on Bellway April 2022 the price drifted down from 2400p to about 1700p (which was a 40% discount to the tangible book value), and at 1700p or similar I should have trousered a lot more but didn't. Anyway with the BWY dividends since then of 45p + 95p + 45p + 95p = 280p and still priced well under tangible under book value I continue to own at 2586p.

csh

[cshfool2]

Trading update:

At 2800p perhaps things are not so bad after all, although the dividend has been cut.

https://www.londonstockexchange.com/new ... e/16508010

Highlights

§ Stronger trading through the spring selling season, with improved affordability supporting an increase in customer confidence and reservation rates compared to the first half of the financial year.

§ The private reservation rate per outlet per week of 0.62 increased by 6.9% compared to the prior year equivalent (2023 - 0.58). This was delivered from a higher number of outlets, which averaged 245 in the period (2023 - 239).

§ Overall, headline pricing has remained firm, and incentives continue to be used on a targeted basis.

§ Reflecting the improvement in trading and growth in outlet numbers, the forward order book has increased from the level of 4,411 homes at the start of the current financial year. The forward order book at 2 June 2024 comprised 5,346 homes (4 June 2023 - 6,172 homes).

§ In line with previous guidance, the Group is on track to deliver full year volume output of around 7,500 homes (31 July 2023 - 10,945 homes) and we continue to expect a reduction in the underlying operating margin3 of at least 600 basis points from the level in the prior year (31 July 2023 - 16.0%).

§ The overall average selling price is now anticipated to be around £305,000 (31 July 2023 - £310,306). The increase from the previous guidance of £295,000 is mainly due to changes in product mix.

§ The Group is now fully sold for the current financial year and given our strong outlet opening programme and healthy forward order book, Bellway is well-positioned to return to growth in financial year 2025.

***

I cut back a lot on the sudden increase associated with the Redrow Bid in February clearing the rest today, though still trading below book - so I have tried to leave something for the next guy, and would buy again on an adequate margin of safety. Redrow would probably have been a better call with 20-20 hindsight glasses on, but this was quite ok especially including the dividends.

More value ideas welcome.

csh