Dev.Secs. Share Discussion Threads

[citymohawk] 21/10/2014 20:40

*Sigh* *eye roll* *fall of chair*

Really must I do this? Maybe I know nothing about valuations, but goodness me I hope I never become complacent. First you compare apples and oranges and now apples and melons. big massive ones.

If you are going to use such comparisons then I will show you the picture of what it looks like when you base line and make the performance relative. Cuppa tea first...

[horndean eagle] 21/10/2014 17:34

CM - Im not going to bother engaging with you any more. You are way out of your depth and have very little understanding on how valuations works. They might be extreme examples but look at DLN, GPOR and CLI disposals of late and you will see consistently huge uplifts on book value when they dispose of assets. This is after they have booked huge uplifts on asset management initiatives they have undertaken. It comes about because they use conservative valuations. DSC have history of valuing assets fully. Its why when they dispose of them you don't see any huge profits being crystallised and why results have been so poor over the years. Look at gains from Hammersmith Grove and then go and look at what HLCL have managed to book in gains from their London developments over the last couple of years. It will make your eyes water.

[citymohawk] 21/10/2014 16:34

*sigh* *eye roll* - Premium to value? There you go again using a one bullet approach. Remember that the premium to book which you ignore discounts the value added through the project life-cycle. This is why your forecasts are illogical because you have plucked figures from thin air.

[horndean eagle] 21/10/2014 16:32

You can probably assume the £15.7m was marginally above book. On £60m of assets they will post a circa 2.5% uplift on disposal. That is way below the norm

[citymohawk] 21/10/2014 16:26

I've just noticed 1 new institution has purchased some 300k shares in the last two weeks or so.

[scburbs] 21/10/2014 16:10

HE,

They sold £23.3m at £1.4m over book, £21m at book and £15.7m at an unspecified amount over book. I think you are reaching a bit with the suggestion that this means assets are overvalued!!!

[horndean eagle] 21/10/2014 15:38

Not an accountant. Dont need to be to able to work out what a pos DSC is. I think NAV estimates may need to be ratcheted down given they disposed of a lot of assets earlier in the year. Booked pretty much no gains on disposal. Suggests assets overvalued if anything. Would always expect sales to go at premiums to valuation. Or at least thats what you see everywhere else in the sector.

[citymohawk] 21/10/2014 15:28

If it wasn't complex everyone would be doing it. This is why you and I are different in how we perceive and profit from the markets.

HE. You assumed the yield, gain, economic value added and got 6%. Tell me you are not an accountant?

[jl9] 21/10/2014 15:27

"Whilst I too may sell out shortly, that doesn't change the fact that I believe DSC to be an exceptionally undervalued play if you plan to hold for a few years."

Just listen to him!!!!

[jl9] 21/10/2014 15:21

The results from DSC will only ever lay between disappointing and shocking.

[jl9] 21/10/2014 15:18

Its complex and these will come good is all you will ever get from CM

[horndean eagle] 21/10/2014 14:59

6% figure wasn't illogical. IPD return is circa 10%. I threw in an assumption for yield making up 4% of that figure. It is probably slightly lower but didn't want to over complicate matters.

I think your advice on holding for a few years might be a bit galling for those who have held for over 20 years and find the share price below where they brought.

[citymohawk] 21/10/2014 14:49

HE - I'm glad you used the words "Hazard a guess" because - That's exactly what it will be; no matter what numbers we plaster here. That includes your 290p call. I'm shocked that anyone will sit and divide 18p by 2 and use a figure of 9p as a barometer/target (if you're an accountant then... you're forgiven).

You seem to have made assumptions of 6% growth? which is of course conservative but why not 2% or 8%? Either use the bench mark or don't. For you to have picked 6% must have been based on some logic or plucked out of the air. You can't then start to use illogical inputs and think that your 290p output has any credibility other than a guess.

No one can say the NAV should be "this" because of xyz bench mark says so; then go on to apply a humble sense of conservatism to support a predetermined market bias. Business models, strategies and objectives are all unique to the firm yet they all enter the same index. Poor quality assets can turn over the right numbers for an accountant but the firm can last 5 mins. These scenarios have been plagues across the markets over recent times.

Furthermore, no one here knows the terms of equity attributed to their JV's. Coupled with a true value on pipeline of work, no one here really has a clue of what to expect. The market wants growth translated into the Balance Sheet NOW and as it has lost patience so has the price. DSC have been consistent in their NAV. This is why the market doesn't like and unfortunately some investors lost their patience for which I don't blame them.

Whilst I too may sell out shortly, that doesn't change the fact that I believe DSC to be an exceptionally undervalued play if you plan to hold for a few years.

[badtime] 21/10/2014 14:36

Sky...bought more LSR on Friday and Monday ..like u hav enough now

[dire cons] 21/10/2014 13:38

DEVELOPMENT SECURITIES REIT

Signal Update
Our system’s recommendation today is to STAY LONG. The previous BUY signal was issued on 16/10/2014, 4 days ago, when the stock price was 188.2300. Since then DSC.L has risen by +0.94%.
Market Outlook
The market is not rosy but our bullish bet is still valid. There is not a definite sign to disturb your comfort.

[jl9] 21/10/2014 13:05

DSC is uninvestible junk, albeit the yawning discount attracts the usual traders and apologists.

Management do nothing but destroy shareholder value across the cycle. That’s a fact. Marx lives in denial over this. Don’t you live in denial. Get out and stay out.

[horndean eagle] 21/10/2014 12:51

You guys sure know how to set the bar low. IPD has returned 10% in the last 6 months and you guys seem to be happy with 4-6%. Remember this is the year when will crystallise most of their gains from purchases made over the last 5 years. This should be a bumper year rather than a large relative underperformance vs benchmark.

Don't think land valuation is neither here nor there. When they work through a development they crystallise the uplift. What you tend to find is they don't really make much once you factor in huge overheads.

I wouldn't really pay any attention to their commentary. Its full of bs. Best just to focus on the numbers that really matter.

I should add if they only report between 4-6% it will probably be the worst performance of any of their listed peers over the period.

[skyship] 21/10/2014 12:45

Hi BT - a very sensible move. Hope you're fully loaded with LSR - I just bought another 20k...that's enough for me as I'm now at 8.9% allocation.

[skyship] 21/10/2014 12:42

The end Feb'14 EPRA NAV was 269p - in itself a disappointment. I would hope to see a 5% improvement to 282p, making the discount 33.3% @ 188p...

[badtime] 21/10/2014 12:38

Bought a few...must be mad

[redhill9] 21/10/2014 12:29

Horndean Eagle, a NAV of 290p would, based on today's sp, put the discount at a ridiculous 35%. A NAV of only 250p would give a discount of 25%, which still seems too high.

I'd be happy with anything above, say, 275p accompanied by some encouraging and plausible comments regarding short to medium term activity and prospects; I expect that would see the share price comfortably back above 210p, which even then would still imply a high discount of c.25%.

Redhill

[scburbs] 21/10/2014 12:15

4-6% NAV rise for me (280-285p EPRA NAV). Anything above 6% would be strong, anything less than 4% disappointing.

They have £40m of development gains slated for this year, so progress on this to date is likely to be the key driver of under or over performance and how much is left to realise in H2 will be critical to assessing whether it is a good performance.

I think that DSC hold any residential land at lower of cost and net realisable value so any pick up would not be reflected in NAV (whereas QED hold their residential land at Wembley at market value).

[horndean eagle] 21/10/2014 10:38

Just ahead of results tomorrow thought it might be interesting to have a stab at where NAV should come in. Forecast earnings which include development profits are for 18p this year. So you would have thought 9p would be a bare minimum before valuation gains/losses. In theory it should be much higher given residential land has been strong in the period and IPD property values also risen sharply. Investment portfolio is £253m. IPD been very strong. Especially in secondary properties. Assume conservative 6% rise and that equates to £15m or circa 12p. Nav should therefore be at least 290p. Anything below that would be another very poor performance. IPD has returned circa 10% in the last 6 months so DSC would still be markedly underperforming.

Anyone else fancy hazarding a guess on where nav ends up tomorrow.

[leedsu36] 21/10/2014 06:23

Suppose you could say that from March this year Sammu,yes?

Well according to above graph that is.

All going to plan,lower highs and lower lows.

[sammu] 20/10/2014 23:39

Looks like big premiums in the closing auction on Friday and today. Looks like somebody has been hoovering and willing to pay up for some quantity - unless somebody can explain otherwise.