Barratt Developments Share Discussion Threads

[sikhthetech] 27/10/2022 11:33

Micro,

I agree with you in terms of trading HBs. It's easy to trade any hyped sector.
Look at the charts in the header of the HBs. They are rise and fall in sync so there isn't much difference if you trade one or the other.


If you're trading, have a look at EZJ. They are already up 20% since I bought. People will still continue going to holiday, trips etc, recession or not, cost of living crisis or not. They go for cheaper, no frills, flights. I'm expecting EZJ to continue rising towards 600p.


"The help to buy system was something of a flop anyway though."

I don't agree. HBs made millions from the H2B scheme.
The company themselves stated that for fy2020 & fy2021, around 45-50% of BDEV's private reservations were using H2B. That is significantly down.. current period was 12%.
So with around 1/2 their private reservations using H2B, how was it a flop?


"we have also seen the expected reduction in Help to Buy activity, which accounted for 12% of private reservations in the period (FY22: 21%; FY21: 51%; FY20: 45%). "



It's the supply of credit which will decide the housing market. Banks are already reducing the supply.

I agree re Autumn statement and as previously mentioned, whether the govn provide further support to the housing market will be a key factor.

[microscope] 26/10/2022 21:06

I understand where you are coming from, Sikh. The economy still faces threats. The help to buy system was something of a flop anyway though.

But with energy supplies now guaranteed through the winter, gas prices falling, (an extremely warm autumn in much of Europe), and steadier hands on the UK economy than the madness of Truss, we could well be wondering crisis what crisis before long.

That all means urgency for further major interest rate rises is receding. A rise this month if it happens could be the last for some time.

The autumn statement will be designed to help markets too, so I think there are compelling reasons why a crash is increasingly unlikely.

TW. is a mess, I agree with you, and doesn't have the balance sheet available here.

The crash has pretty much already happened in this stock, not as though it's just starting, and as always in the stock market, fundamentals will win out over time, and this company will do far better than TW imho.

All that said I'm not proud, and if I get the chance for 20 percent in a matter of weeks, I'm inclined to accept it (and I will have made a good call at 325p). There will still be bumps in the road, but I'll stand by my call that 325p will be a good entry point for patient investors, if it does come again.

[sikhthetech] 26/10/2022 20:21

The next 3 weeks or so will be interesting to see the current direction.

31st Oct - Help to Buy ends to new applications. The rush to apply will skew any data.

3rd Nov - BoE interest rate meeting.

17th Nov - Chancellor's Autumn statement.

Also in Nov HBs give updates.

[sikhthetech] 26/10/2022 20:18

Micro
"It might be if we get a market crash it goes even lower, but I predict anything of that sort would be short lived"

Market crashes don't tend to be short lived. It usually takes years before house prices recover.

During GFC in 2007-09 the share price fell around 80-90%.



"People talking of a 40 percent housing crash. This stock was already 60 percent off, yield was 11 percent and a buyback underway."

Buy backs don't stop a housing market crash nor stops the share price from falling. Taylor Wimpey had a buy back yet the share price continued to fall further.

[microscope] 26/10/2022 17:52

When people look back in years to come, suspect 325p will be one of those 'Why didn't I buy a load more' moments.People talking of a 40 percent housing crash. This stock was already 60 percent off, yield was 11 percent and a buyback underway.Sure the shorters were right from 950p, and I agreed fully with that, but there comes a point with every stock that a short (or a buy) outstays its welcome.It might be if we get a market crash it goes even lower, but I predict anything of that sort would be short lived, and a gift for buyers, and getting a second chance a bonus.But 325p was an obvious overshoot to the downside at this stage, and anyone hoping for that second go best not hold their breath imho!

[cwa1] 26/10/2022 07:53

* Barratt BDEV.L : JP Morgan cuts target price to 490p from 530p

[creditcrunchies] 25/10/2022 20:21

Yes true I might actually have to find one I can eat ?

[microscope] 25/10/2022 14:47

Crunchy, maybe you should be checking out your favourite hat recipes.... If this holds above 360p, there's not a whole lot of resistance between here and 400p.... ;)

[porsche1945] 22/10/2022 14:30

Raising interest rates into a recession to control double digit inflation, an almost unheard of scenario, it’s a worse situation than 08, 7/8 year normal housing cycle will see these sub a quid before this reverses and years to recover. Have to laugh at Deutsche, I remember them cutting Ferrexpo from 5.50 to 3.20, six months later the shares were .18p. Hysterical how behind the curve they all are. Always droning on about supply, supply doesn’t mean shxt if you can’t afford a mortgage over 5pc. Just short anything that has a U.K. facing business.

[sikhthetech] 20/10/2022 16:00

As some like to see broker targets.
Deutsche Bank nearly halves BDEV tp from 835p to 462p....

I've said before brokers are like sheep and follow and not lead.



Deutsche Bank cuts Barratt Developments price target to 462 (835) pence - 'buy'

[creditcrunchies] 17/10/2022 17:00

I'll eat my hat if these go over 400

[creditcrunchies] 13/10/2022 13:25

All of a sudden it's panic buying lol

[lafiamma] 13/10/2022 12:59

Interest rates on Gilts falling sharply on reports of the next Kwasi/Truss moves (or possibly backtracking)Regardless, the share prices across the sector are way undervalued and so heavily shorted right now that it doesn't really need any news for these to rise, just a sense of unease from the shorters...

[gill17] 13/10/2022 12:48

Yeah, what caused this rise?

[lafiamma] 13/10/2022 12:44

Shorters have just been caught short...

[microscope] 13/10/2022 12:21

I agree STT that this recession is far from done, and there could be downward pressure on pretty much all sectors, however the average recession in the UK since WW2 has lasted 16 months.

There are good reasons why this one is likely to be longer and deeper, COVID, Brexit and government madness.

That said, Truss and co are having to learn very fast that being in power doesn't mean just doing whatever the hell you like.

This stock was trading around 900p just pre-Covid, and has lost a substantial amount in recent months.

And it's a good point that 10pc yield can on occasion be a red flag. Unless you have substantial cash reserves and a strong, resilient balance sheet, that is, as here. They wouldn't be accompanying that yield with a buyback unless they felt very assured about these factors

Of course business has been hit in some areas, but everything has its price, and here, or lower, is in my opinion fully factored in.

The statement was better (or less bad, if that's your take) than most predicted, given how far the share price has already fallen, and while, as all, they're not immune to a market crash, they're in a far better financial position than most to weather such a period.

Anything around this mark (325p) or lower, and I think long term investors can start accumulating with reasonable confidence.

[gill17] 13/10/2022 12:17

My daughter and her fiance are buying a property in London for £775,000 (FTB). They have considered pulling out and spending 150K less, but arranging a new mortgage will be considerably higher repayments than the 3.4% they have currently. The have looked at all the options but are trying to exchange this week as they want to move on with their lives.

[horndean eagle] 13/10/2022 11:42

I struggle with peoples stupidity at times. What did you expect to happen to new reservations in the last few weeks? Is the fact they are down hugely surprising? Just don't grasp how peoples lives have to go on. I have a friend who has had an offer on a 1m+ property accepted in the last month or so. He's not particularly thinking about backing out even though he expects prices to fall. The same will apply to a lot of people. Lending markets need to calm down. Once they find a stable level circa 4-5% then its back off to the races. I would expect overseas cash buyers to step up to plate as well. 15% of london buyers are cash buyers according to BDEV. With pound so weak would expect that rate to pick up.

[my retirement fund] 13/10/2022 10:11

Figures out by the European court of auditors show Britain's Brexit bill growing fast with interest rates increasing. Having paid down the divorce bill to 42Bn in 2020 and 37Bn 2021. It is on target to cost everyman, woman and child in the UK £900 each. Defiantly a price worth paying to give up your rights to live and work in Europe, and making our importing and exporting costs far more expensive and complicated and certainly nice not to have the right to return any immigrants to the first country of transport too as they arrive on our stony kent beaches. (1000 on Sunday alone). Excellent value, really enjoying the benefits of it all. How about you ?

[creditcrunchies] 12/10/2022 23:27

I'd forget looking at the dividend yield once it goes over 10% it's in the red zone either the share price recovers or they start cutting the dividend then it just snowballs until it finds a bottom. The markets abandon ship when they start cutting dividends. This has already crashed -60% from the high from January 2022. All housebuilders, leisure and retail blue chips have crashed those are the main drivers of the UK economy flat on their backs. With the Fed still hiking it's impossible to get policies in place to kick start a recovery. Pretty grim at the moment.

[sunshine today] 12/10/2022 20:47

microscope12 Oct '22 - 20:21 - 2663 of 2666

Hello, so i see sunshine must be shorting here too. Recessions don't last that long. Looking at this myself, apparently yield massive



///////////////

Lol

Never shorted any stock.

It took no less than 25 years for America to recover the 1929 Wall St crash.

[sikhthetech] 12/10/2022 20:42

Micro,

The time to buy will be once there's clarity on all the challenges, interest rate rises/direction, inflation direction, govn providing some clarity..

Dividend yields are very deceiving when there's so much uncertainty and potential housing market crash. I expect HBs will want to conserve cash during a housing market crash, so expect some/all HBs to cut divis.


Watch the number of homeowners in severe mortgage debt/repossessions and auction listings...

Watch the demand fall and the supply increase.. it snowballs..
;-)


The NI tax increase has been reversed, income tax reduced. The remaining still apply.

sikhthetech20 Feb '22 - 15:26 - 5884 of 5899 Edit
<...>
When the housing market crashes, no HB is immune from the crash. Likewise, listed HBs are not immune from stockmarket falls or movements.

Govn support, provided during pandemic, has ended. Repossessions which were stopped during pandemic are legal again.
Around 30k homeowners in severe mortgage debt.
Inflationary pressure, interest rate rises, NI rises, Council tax rises, energy price

[sikhthetech] 12/10/2022 20:38

They reported a huge drop in reservations, which is a major concern.

Plus with Help to Buy ending to new applications at end of this month, that number should fall going forward.


"Reflecting the slower reservation rate, total forward sales as of October 9, 2022, totalled 13,314 homes compared to 15,393 last year at a value of £3,603.1mln (2021: £3,936.6mln)."




Director buys and buy backs wouldn't stop a housing market crash.

[ghhghh] 12/10/2022 20:21

Sunshine

Please don’t make stuff up. Lenders will prefer new build since energy efficient and therefore greater demand.

Bottom line is that there is a chronic shortage of housing and people have to live somewhere. House prices will be underpinned by comparable cost of renting.