Crest Nicholson Share Discussion Threads

[1gw] 05/11/2015 12:33

Nice BoE inflation report for the housing market outlook.

"Domestic momentum remains resilient. Consumer confidence is firm, real income growth this year is expected to be the strongest since the crisis, and investment intentions remain robust. As a result, domestic demand growth has been solid despite the fiscal consolidation. Although it has moderated, growth is projected to pick up a little towards the middle of next year, as a tighter labour market and stronger productivity support real incomes and consumption, and as accommodative credit conditions encourage strong investment and a pickup in the housing market. The Committee judges the risks to domestic demand to be broadly balanced."

[salpara111] 04/11/2015 15:13

I am always cautious about going overweight on a stock but I couldn't resist having a few more at 510.

[buffetteer] 04/11/2015 13:59

Good post 1gw. Liberum seem to be trying to pre-empt the end of the builders bull market. I think they're wrong and the demand for houses is v strong and don't see this dropping off anytime soon due to supply ,affordability,earnings growth ,confiidence .The North is only just starting to see the upswing - hardly factors for a falloff . We will see when results come in early next year .

[1gw] 04/11/2015 13:42

Not really - except perhaps I think there's a fairly high level of nervousness around housebuilder valuations at the moment, so when someone comes out with a bearish note (e.g. Liberum yesterday) it perhaps has more impact than when a bullish note is issued. A lot of the housebuilders have lowish p/e's (which is what I tend to focus on) but are priced at a high premium to NAV and people are nervous about the sustainability of the earnings.

Personally I think Crest is relatively well-placed because it isn't just relying on continued house price growth: it has a credible strategy for growing volumes through the new division it has opened and more recently through the push into the institutional private rental sector. And I think it has the potential to surprise positively on 17th November in terms of both outlook and the full year numbers because of the house price growth that I think they will be capturing.

[adamb1978] 04/11/2015 12:51

Any views on whats causing the weakness in this? The persimmon TS was strong this morning I thought

[1gw] 04/11/2015 12:06

Added some at 518p. Roll on 17th November.

[aishah] 03/11/2015 09:40

02/11 - JP Morgan UPGRADES to OVERWEIGHT. Ups target to 650p from 600p

[1gw] 02/11/2015 08:11

Nice start to the new financial year. Let's hope it continues.

[deadly] 27/10/2015 11:20

strong rise today again.
Been very volatile of late, good for trading.

[shekari] 23/10/2015 21:12

messed up share

[deadly] 23/10/2015 10:02

Off sharply today against the rest of the market. Looks like a chance to top up.
Any news?

[a1pappadingdong] 15/10/2015 12:02

1gwMany thanks for that informed and well thought out reply, I do appreciate it. Responses such as that make posting here worthwhile.Im not a holder of Telford and therefore I didn't know that it forward sells, or that their market differs so differently to Crest.My statement was in hope as much as anything!I agree that the outlook and growth potential for Crest are excellent. Good luck also with Telford, I see Jim Slater recommended it and I'm a big fan of his. I may have a closer look now, especially after yesterday's results.Thanks again

[altom] 14/10/2015 17:00

i hold Crest & Telford and also Inland. Very happy to stay with all 3 for the next few years.

[1gw] 14/10/2015 08:25

A key difference between Crest and Telford (and I hold both) is that Telford forward-sells as much as possible to optimise working capital and minimise the risk of house price falls, whereas Crest for some time has been delaying sales (relative to construction) in order to capture house price inflation.

So in the current environment I think Crest's sales strategy is a winner and the current house price inflation will more than offset any rises in building/labour costs, whereas having locked in sales prices Telford is exposed to building/labour cost inflation.

In terms of markets, they are both in "the south", but I think Crest has much more of a weighting towards houses (rather than flats) and the outside-London market (rather than Telford's East-London focus) and probably towards owner-occupier rather than buy-to-let.

Both have excellent growth potential in my opinion. Crest through its new division, good landbank and perhaps more excitingly its move into the private rental sector targeting institutional investors; Telford through its development pipeline.

Telford has an expected dip in profitability to get over (in the year to March 2017, caused I think by a planning delay on a big development) whereas I am hoping Crest's growth path is a bit smoother.

My opinions only. Please do your own research.

[a1pappadingdong] 14/10/2015 07:36

Nice to see a blue day yesterday at last. Great trading statement from Telford today (profit doubled). Outlook also strong. So hopefully we can expect similar, or better, from Crest as they are in similar markets.

[sundance 13] 13/10/2015 07:44

Strong results and outlook from Bellway this morning.

[a1pappadingdong] 13/10/2015 07:43

I think your right, and I see what you mean about it tracking Barratt.My biggest problem here is that I thought there was an interim management statement due at the beginning of September and I bought in advance of that-right at the peak of the GS news!Obviously that's not materialised, and now the share price is following its normal trend-but hurting me!I've traded this share quite well from 520-570 a few times this year, so I'm pretty angry at not getting my dates right. That said, long term this looks great. Low PE and PEG. I also noted that they plan to increase revenue to £1.4 Billion (currently £728 million) so plenty of room to grow and margin of safety. GS target of 790 is very achievable long term.Roll on the 17th of November!

[1gw] 12/10/2015 17:05

If you look at a 3 month chart of Barratt Developments vs Crest Nicholson, the share prices track each other pretty closely, with the biggest variance coming around what I presume was the time of publication of the Goldman Sachs upgrade (i.e. 9th-10th September).

So perhaps it's as simple as that: the Crest price got a temporary boost from the GS upgrade and it has now fallen back to housebuilder trend waiting for the 17th November trading statement. It's a long time from 16th June interim results to 17th November TU.

But then I don't know what I don't know...

[a1pappadingdong] 10/10/2015 13:05

Anybody got any ideas why the steady fall recently? It's dropped almost 10% since Goldman Sachs made it a Conviction Buy with a target of 790. The markets have been on an 8 day winning streak, but this has consistently fallen.Doesn't make sense, is there something else going on?

[martinthebrave] 09/10/2015 17:58

Crest Nicholson (LON:CRST), the residential developer focused on the south of England, is the only stock to make it on to Goldman’s ‘conviction buy’ list, with the target price going up from 590p to 790p.

[...]

Buying opportunity today maybe?

[1gw] 02/10/2015 14:26

Well I've just bought some more. I don't understand the logic of:
US jobs miss expectations ---> US treasury rates and US equity futures fall ----> UK rates and UK housebuilder shares fall in sympathy.

I would have thought the US jobs miss does indeed tend to make it likely that UK rate rises will be delayed, but that ought to be good for the UK economy in general and for housebuilders in particular oughtn't it?

[salpara111] 09/9/2015 12:37

Oh err!
I was wondering if it was time to leave this party as the share price seemed to have stalled but the fundamentals seem so strong that I have held on.
I doubt we will even see £7 in the next 6 months but if it can get to over £6.50 I would be inclined to take my money off the table.

[1gw] 28/8/2015 16:32

And have taken profit again on that 24th August purchase. 9% up in 4 days and the chance of who knows what out of China and Jackson Hole over the weekend - so I'll take the cash for now. Crest remains my second biggest holding.

[1gw] 24/8/2015 09:29

I'm treating this as another buying opportunity and have bought back the shares I sold on 12th August. I also sold out of TW. on Friday so still have some powder dry, although I didn't really expect to be buying back in the housebuilding sector quite so soon. Anyway, this global equity market turmoil may well push back interest rate rise expectations (or bring more stimulus) and I'm hoping for a good IMS in the middle of September with further news on their private rental sector initiative. On the other hand, difficult to call the bottom on the current general decline so I'll be keeping a close watch.