Berkeley Share Discussion Threads

[melody9999] 23/10/2014 08:19

foxt results causing the concern. i'm out and will watch for a while

[redips2] 17/10/2014 09:52

Nicked a weeny few more in y/day's dip, will do for now .

[scottishfield] 17/10/2014 08:36

perky start :)

[tudes100] 16/10/2014 16:01

plenty of buyers looking for quality as soon as the market turned

[hpcg] 16/10/2014 11:11

I did buy at 2050 on Friday. I don't think we've turned the corner but I want to phase my cash back in to the market rather than try to pick the bottom. The London house builder sector as a whole is starting to look like it has some backbone in share price terms. Hardly surprising since there is a couple of million extra people on the way.

[sogoesit] 16/10/2014 10:04

Thanks for that CR; just wondering whether I detect a bounce at 2100p or so for an accumulate.

[cockneyrebel] 16/10/2014 07:44

TEF trading update very strong:

Snippets:

"Suggestions of a price bubble in London are unfounded in the locations that Telford Homes is operating in, where the Group focuses on building the right product at relatively affordable prices especially when compared to prime Central London. As the Board predicted, the rate of price inflation experienced by the Group has necessarily slowed as affordability constraints on both mortgage payments and rents act as a welcome restraint, however prices are certainly not falling. Ongoing control of the mortgage market by both individual lenders and the Bank of England is preventing a credit fuelled bubble and as such property prices are able to find their natural level."

"There is no greater evidence of the strength of demand for the Group's product than the success already achieved at the launch of Stratosphere, E15, a spectacular 36 storey tower in the heart of Stratford. The Board is delighted to report that over 200 of the 307 open market homes have already been sold, subject to contract, the best result that Telford Homes has ever achieved at a single launch. The launch commenced on 2 October 2014 with over 100 sales achieved in the UK and the remainder are being sold to overseas investors at events that continue until the end of October. "

[badtime] 15/10/2014 19:22

If u are gong to buy into this sector surely BKG should be top of your list

[scottishfield] 15/10/2014 18:51

wise man CR (I added too )

[cockneyrebel] 15/10/2014 18:50

Only just noticed a director doubled his holding today with a 2k buy.

CR

[cockneyrebel] 15/10/2014 17:22

jpsmithson - yep, I'm not saying things in London are as hot as they were and they may be negative in parts. But then BKG has given back 25%. At what price do you think that will be factored in?

Worth reading the recent trading update imo:

1 September 2014
At the Annual General Meeting of The Berkeley Group Holdings plc ("Berkeley" or "the Group") being
held today, the Chairman, Tony Pidgley CBE, will make the following Interim Management Statement
which covers the period from 1 May 2014 to 31 August 2014:
"The last five years have seen a period of sustained investment in land and construction for Berkeley. This has enabled the Group to deliver some 15,750 new homes in London and the South East of England over the period and support over 21,000 jobs directly and in the supply chain in the last year alone. A strong market in the last financial year, in which cash due on forward sales rose to over GBP2.2 billion, left Berkeley well positioned at the start of this year to maintain its investment and contribution to the UK's economic recovery.
Since the start of the current financial year, the market has reverted to normal transaction levels from the high point in 2013, providing a stable operating environment. Demand for the right product with good design in the best locations has remained resilient and, reflecting this, forward sales have been maintained at the levels previously reported.
In respect of our land holdings, the Board has targeted further growth in the value of potential gross margin over the course of the current year, driven particularly by unlocking planning and gaining access to the land currently held in the pipeline, which comprised over 11,000 plots and had an attributable potential gross margin of some GBP1.5 billion at the last year end. Good progress has been made in the period to unlock a number of these sites, and we will provide an update on this at the half year. New planning consents at London Dock in Wapping and a site in Chiswick in the period have further enhanced the quality of the land bank held unconditionally and the acquisition of two new sites in the period on a conditional basis into the pipeline provides further visibility on the availability of land in the future.
The disposal of a portfolio of the Group's ground rent assets for GBP99.8 million, which completed on 17(th) June 2014, has contributed to a strong operating cash inflow over the period. The Group currently expects to remain ungeared following the dividend payment of 90 pence per share (GBP121.7 million) on 26 September 2014.
A further 180 pence per share is payable as dividends in order to meet the first milestone of paying 434 pence per share by September 2015. The Board has previously indicated that it will aim to make regular dividend distributions where conditions permit and is on track to meet this commitment. Looking to the next milestone of 433 pence per share in September 2018, the Board intends to meet a proportion of this through regular dividend payments, where market conditions permit.
With a strong balance sheet and land bank Berkeley is well positioned to continue to invest in the business and deliver returns to shareholders. Earnings this year are anticipated to be in line with current market expectations."

------------------------------

You get 180p up to Sep 2015 and 433p within the next three years as I read it - so a return of nearly £6 over 4 years?

That's a lovely income when bonds are are record low yields and banks are paying 1% if you're lucky.

All imo.

CR

[sogoesit] 15/10/2014 16:21

True, the market is a bit slow; I wouldn't say soft but post September the market does tend to slow down a bit.
What surprises me is that, for similar financial rewards, BKG performs worse than PSN; I haven't figured out why (I own both for the dividend streams).

People do say every now and again that the London market is due for a correction; and this has been the case since 2009. But the correction hasn't happened even in the recession so far. Maybe when interest rates go up that will change, who knows.

As for SW London the CAGR on my property to date has been 9.2% since 1996 which beats most of my investments. So I figure the same should apply to (London) house builders.

[tudes100] 15/10/2014 16:15

I think what many forget is that many in the housebuilding industry do not want the market "booming" - 10%+ increases every year. All this does is drive land prices up significantly (which balances any increases in average sale price) and dramatically increases the chance of government interference in the sector as the price of a house becomes increasingly out of step with incomes.
A period of stagnation (or calm, however you want to term it) is no bad thing and will certainly reassure potential buyers that the market is not in danger of dramatic decline. When we finally get some wage growth it might also improve the income to house price relationship in some parts of the country where it is clearly out of step.
We have net immigration still and a chronic shortage of housing nationally so I just don't see the drivers for any housing crash. Sure, London & the south east are expensive and will remain so but the drivers for this market are slightly different from the rest of the UK.

[cockneyrebel] 15/10/2014 11:32

free stock charts from uk.advfn.com


London builder TEF has it's trading update tomorrow.

Is London property finished? I doubt it.

All imo/dyor etc.

CR

[essentialinvestor] 11/10/2014 17:20

Lucky, that's a bleak outlook, in general and not just BKG specific.

I would agree that current wider equity valuations rest on the economic cycle,
for me it's not yet clear that wider global recession looms large,
although agree that the EU area is looking increasingly dire.

If Q1 2015 US earning begin to be hit and average EPS numbers start to fall,
then the bull market is over.

Finely balanced atm is my best guess.

[luckymouse] 11/10/2014 16:30

Long term BKG log chart describes the economic cycle surprisingly well. The MACD and divergence implies we are at the top right now.

Hurtful sanctions on an EU economy that was struggling to start with, rising geopolitical risks, end of US bull mkt, oil price war & lack of real EU growth will in combination likely trigger a triple dip EU recession imho. Worth bearing in mind if you happen to be considering any strategic decisions.

LM


free stock charts from uk.advfn.com

[sogoesit] 11/10/2014 14:46

BKG (black-rhs) vs PSN (red-lhs)

[luckymouse] 11/10/2014 13:45

Be careful - there has been buying in the past at c.2000 so traders will probably hit that on technicals - but longer term it could confirm then do the big one - especially if the broad mkt does similar - which it might

[bamboo2] 11/10/2014 12:30

The confirmed Head and Shoulders pattern formed here does have a number of shortcommings that could make it less reliable. Normally we could expect a 73% chance of it hitting target.

There are two large patterns, and a few smaller. Of the two drawn in the chart above, one has an upward sloping neckline, which is a few percent less likely to complete to target. The other with the more horizontal neckline has an extended right shoulder, which again reduces chance of meeting the target.

There is always the chance of pull-backs [that can rise above the neckline] during the down breakout.

======================

[hpcg] 11/10/2014 11:21

I agree about the general election risk to an extent, though the London mayoral election is even more pertinent. If David Lammy becomes the labour candidate, likely as he is by far and away the most electable candidate they have, then the political risk reduces a lot.
For BKG we are largely talking about the affordable home aspect in developments. I think the economic risks to London are minimal and the demand for accommodation insatiable. Costs are the biggest worry, but a slower economy actually reduces that risk. With the share price 20% off its top I am sceptical the share price will drop below 2000. The chart looks awful though, and there is nothing between 2000 and 1500 which looks like a resting level. Looking at fundamentals best I can do is 10% dividend mark at 1728. Price to book of 1 would half the share price from here, which given the capital return plans would make the shares free within 5 years.

[badtime] 10/10/2014 23:29

Markets not always rational though is it ..i just think confidence has taken a bit of a dent in markets overall and there is a tad too much uncertainty ...add in GE due next year etc ..it all doesn't help...but one thing is for certain stick to quality and i'm not sure anyone could argue BKG isn't that

[essentialinvestor] 10/10/2014 22:03

US close does not look great and futures off further AH.

[badtime] 10/10/2014 20:50

Unless current sentiment changes i'll only start phasing money in a lot lower than £20