Bellway Share Discussion Threads

[essentialinvestor] 17/10/2018 13:58

Walbrock, nice piece of analysis, thanks.

[ygor705] 17/10/2018 12:51

Poor sentiment continues to dog Bellway but the PE is now looking a bit silly. Yet another big increase in the dividend leaves very little justification to sell but dyor.

[mtsblogs] 17/10/2018 12:12

Redrow is aimed at a more ...mature audience, its head (who formed the company and holds 20% I believe) is very old-fashioned and a little stubborn. I suggest you check out his videos where he is taking with apprentices... I've looked at different house builders and BWY stands out. From financials, its NAV, p/e, price-to-book, current ratio, to how its products compare to others (Redrow, Crest). New management is good news too. Out of all house builders it has the best chance to do above average. Not guaranteed to double, but one-two percent above average is likely.

It's a steal at this price: 6.89 p/e (!), 1.4 book (!!), current ration 3.8 - it beats other builders on all fronts.

[dr_smith] 17/10/2018 10:48

mtsblogs - No, I haven't seen Redrow houses - are you saying they are good or bad design?

I hold a number of housing shares and they have been hit today, aswell as the as the last week. I assume it's Brexit.

I held housing through the Brexit vote (now way back) thinking they would be the safe port in the storm for investors and if anything go up. They dived as you know..but came back stronger, so felt my gut instinct was mollified.

I am hoping it is the same now, regardless of Brexit we all need to live somewhere, we will continue to trade between ourselves and the world. So expecting the low sector sentiment to turn.

IMO :-)

Dave

[mtsblogs] 17/10/2018 10:10

BWY is a cracking company. New management is great and standardisation of houses is long overdue, well done CEO. Financially, everything looks right and price-to-book is even better after results. Its a steal and now they have 100M cash too. I do not expect this to rocket today or tomorrow, but it is likely to do better than average in a long run. Compared to peers, its stronger and, frankly, the design of houses is very good (have you seen Redrow??) FD seems out of place and I'd not be surprised if he moves on.

[walbrock82] 17/10/2018 06:38

After nine years of continuous sales and growth, is #Bellway still a good investment or has valuation been priced in? Here are Walbrock’s thoughts:

Enjoy!

[walbrock82] 16/10/2018 11:57

Bigbertie,

Since Bellway is cylindrical, it implies a different interpretation of PE. So, a low PE tells investors to expect slower earnings growth or a possible decrease in earnings in the future.

A high PE (like in 2010 and 2011) tells us to expect higher future earnings growth.

Hope this clarifies things.

[walbrock82] 16/10/2018 11:35

Summary of Bellway’s results

1). Bellway with sales coming in at £m, marking 9 years of sales growth. During that period, it manages average sales growth of 17.65% p.a., and the latest sales growth is below average.

2). Thanks to government schemes such as “Help to Buy”, home prices and higher prices contributed to this higher revenue.

3). Bellway’s order book volume grew by 2%, compared to last year 2.2%, but the average home value fell from £272,962 to £268,767.

Meanwhile, reservations per week growing at 2.9% in the first nine weeks, this was down from 5.6%.

Article tomorrow.

[dr_smith] 16/10/2018 11:21

Thank-you Big-Bertie.
Everyone refers to the sector as cyclical, but I don't see it that way.
The BOE and gov do everything they can to avoid peaks and troughs, boom and bust, I see cyclic activity as a failure of policy and interest rates, something that CAN happened, not something ordained to happen.

There are also strategies that can be employed to mitigate effect of rising costs.
I remain LTH.

Builders can also maintain t/o (rather than increase) and return money to s/h, giving the same effective ROCE to investor, without having to progressively get bigger and bigger.

IMO. :-)

Dave (middle name Russell - not a Doc)

[bigbertie] 16/10/2018 10:04

Doctor I'll provide some company for you. The results are great but the concern is that the housing sector is heading for its usual cyclical downturn. Gross margins (which have been rising) fell slightly, so costs are rising faster than sales prices. There are several reasons why this trend may continue [skilled labour shortage, material cost rises, land costs rising, house prices already high].

However Bellway seems to live on lower p/e than its peers which is surprising considering its recent good track record. Cant explain it! I sold out a year ago and am hesitating to buy again now.

Good luck.

[dr_smith] 16/10/2018 08:21

Me again, talking to myself again it seems.
Final results out today.
That means you should be excited and writing lots of important stuff.

Business as usual despite doomsayers on these boards for this sector,and low sentiment.
Last year PE was 8.8, now 6.8, so it is low sentiment not fundamentals holding back share price
I read this morning Aliens had landed in Mongolia.
Aha.. so you are awake! Just testing ;-)

Whilst we have world trade wars, all storm in a team cup really, but I see property sector with it's supply/demand imbalance as good as any sector if not best, for longer term investor with lowish risk. Just cos it doesn't have volatility that traders thrive on, they stay away, but I am happy to play the long game.
All IMO. - Apart from the Aliens bit.

Dave.

..phwooooooh... tumble weed crosses...

[dr_smith] 30/8/2018 08:45

Today I see "Broker Forecast - Deutsche Bank issues a broker note on Bellway PLC... raised its price target to 3745p (from 3716p)."
I never pay attention to brokers forecasts but note the target (whatever date that is) is way above current share price of 29.39.
I am no chartist either, but a line from share price 2014 to 31/12/17 would imply an share price of 37.00+
Personally I use EPS (420.96p) and planned EPS growth (5%), that tells me the PE ratio makes it a great choice, along with most of its peers in building sector.
Sentiment is low and it all depends upon your outlook and view of property cycle.
IMO whilst UK population expands and we continue to under suppply houses compared to the increase we are good.
I cannot think of any other sector with so few risks.
You could counter with CRLN but I don't see them as representative of most/all other builders.
Being low risk with no surprise news in sector, means it is boring for day traders who want to make a turn in days not 6 months to a year. As market share price is largely influenced by such short term traders, I believe this is why sentiment is so low.

TU said: " preliminary results announcement on Tuesday 16 October 2018"
Maybe share price will correct itself and come back in line then..but don't hold your breath.
I remain a patient lTH. :-)

Dave

P.S. Am I talking to myself, it's been quiet here for a few months - just me. Even if you have gone away for the summer you have the www.
Yes.. there are better things to do...I do need to get out more. ;-)

[dr_smith] 17/8/2018 12:07

Builders shares down circa 2% today, BWY one of the bigger fallers at 2.29%.
I don't see how Trumps many waves, trade wars, Turkey etc has any relevance to UK property, so what have I missed?

[compnews1] 09/8/2018 08:59

Investors do not seem to like the positive result posted yesterday although I think is is a much safer share to buy (No debt +cash, sale up) among others. Investor Chronicle recommend "BUY"



Extract from IC
"Valuations aside, the market’s initial reaction seems positively churlish in view of the anticipated 22 per cent operating margin, which should lead to “another year of significant earnings growth”. Revenues were up 16 per cent to almost £3bn, while Bellway exited its July year-end with net cash of £99m (from £16m in 2017), despite forking out £784m on bolstering its land bank. There was also a symbolically important milestone with over 10,000 new completions through the period – a first for the group. The average price of a Bellway home increased by 9.4 per cent, but management warned that growth rates would moderate going forward – which probably did for the shares as well. Buy at 2,916p."

[philipo1] 31/7/2018 06:33

Housebuilders could be on the up today on the back of a sector retreat and good half year results from TW.

[dr_smith] 12/6/2018 13:32

Yes, trading update looked "as expected"..then share price tanks and I find CRST Hy report which says:
"Our experience of generally flat pricing against a back-drop of continuing build cost inflation has, however, had an adverse impact on our margins and we have taken a number of actions to seek to offset build cost pressures and invest in areas of greater housing affordability. "
On my speed read of BWY, I didn't see any similar comment, will have to read again, but CRST comment seems to have hit the sector.
I haven't decided yet whether that is reasonable..or whether others (e.g. BWY), haven't employed "flat pricing" so not the the same issue.

[gp1948] 12/6/2018 08:20

BWY trading update out today.
In the year to end of July 2018 they will have sold over 10000 houses at an average price of £280000. A record achievement for the company. BwY are on a P/E of 7.9 for the current year, falling to 7.4 next year.

[compnews1] 27/3/2018 08:09

I find it odd too, investors tend to like high PE stocks. Ok, there are uncertainties but it is a solid business, revenue & profit up. This is a stock I would keep piling when price drop.

[ygor705] 26/3/2018 07:17

The share price looks cheap to me at around the £30 level. Steady improvement in both profitability and dividends have been ignored by the market. Fundamentals continue to look good and adjusted for interims I make the PE around 7 1/2. What do management need to do?

[karateboy] 11/12/2017 15:47

I hope the first half report is going to be as good as BKG.

[r ball] 23/11/2017 06:07

But possibility is now there.

[mkmmkm1] 22/11/2017 22:26

Do you really think a Tory Government will force CPO of housebuilders' land banks??!! Absolute rot.

[r ball] 22/11/2017 20:57

Errr..no. Land banking tax! You need to analyse the land banks the house builders have against build rates.

[rick802] 22/11/2017 16:36

Thought today's budget was quite good for the building sector?