Berkeley Share Discussion Threads

[philo124] 21/1/2015 20:02

Yes, there was a shortage of Cotswold stone before xmas.

[citymohawk] 21/1/2015 17:29

hehehe Dr. You should see what goes on under those bowler hats.

I guess I just like getting the best price. I have always been an advocate for behavioural trends. So, if the fundamentals are sound, it's still great to exploit market exuberance/panic to ones advantage. I have several companies on my watch-list which I could quite easily buy today and not panic if I held them for the medium term. However, if I know I'll get a better price then I tend to wait. More recently, that skill needs a little more practice. I do not expect to sell BKG for less than an 8% profit (excluding divi).

Hey GB - Management is certainly not an issue here at BKG. I think, when compared to CRST, BKG hasn't has the same foresight on the 10yr+ horizon. However, that is neither a good thing nor a bad thing. It's today that matters and that is where BKG are over-achieving.
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Going back to the point on market behaviour, housing is a great example. Mortgage Approvals are down! And??? This is the problem with analysts: many of them are 1 meter deep and 1 mile wide in their thought process. Jefferies seem to think that all of a sudden because mortgage approvals are down (and what ever else) construction sector inventory levels are going to inflate across the house building sector, margins will be slashed, jobs will be cut etc and the panic sell button starts to flash across those institutional interns and apprentices. I can't walk through London without the threat of tripping over a crane ;). For crying out loud we are struggling to find bricks!!!! Up until 2014 one house builder were un-building old projects for bricks because of the amount of brick mills closed during the recession. I won't mention their name, but I know this first hand. We are struggling to find human resource and the supply chain is creeking! We are struggling to compensate for future demand! The only panic I see is too much demand.

[dr_smith] 21/1/2015 16:44

CM:
1. I used to work in the City and don't recall seeing any Mohawks there.
2. Sleeping:
An investor follows the business plan/prospects.
A gambler follows sentiment.
You bought wisely, albeit at a higher price (as did I), but on long term priciples not short term guesswork.
If you agree that is fair comment you may sleep easier.

Re volatility, I've learnt the hard way, no matter how good and low risk a company seems, keep a good spread across co's/sectors to mitigate the volatility which has to be expected.
I know you know that, but it helps to hear someone else say it ;-)

[gargleblaster] 21/1/2015 16:31

Thanks for the insight cmh.
Not sure about the management issue though - Tony Pidgley has shown himself to be astute in terms of the property cycle on many occasions whilst others have floundered - happy to have a chunk of money under his guidance!

[scottishfield] 21/1/2015 15:44

good post cmh

[citymohawk] 21/1/2015 14:58

whilst I'm gutted on my entry point for BKG I still have preference to them over CRST, and CRST is also one of my favourite companies too.

From the VALU thread a few days ago:

citymohawk - 05 Jan 2015 - 13:54:50 - 1542 of 1602
I love both the companies relative to different time frames. Today BKG has the edge on short term value. In other words, there is a bigger gap to close quicker on BKG.

The multiples on book value are the same for both companies but BKG has a lower premium on earnings of 9x (vs CRST 12x)

On cash flow multiples you have only 8x on BKG whereas it's 12x on CRST. BKG is also superior in terms of ROE of 27% vs (17% on CRST)

Also, the price you pay for growth is in BKG's favour too. It's about 30p for every £1.00 of growth (BKG) and about 38p for every growth £1.00 of growth (CRST)

On debt, (whilst this is a trivial case in favour of BKG) the % of LT/debt is greater on CRST compared to BKG.

BKG is a far superior company in many ways in terms of realizing cash in the "shorter" term compared to CRST.

Now what CRST have that BKG hasn't got is a superior management team and a more sustainable long term horizon. BKG are more of a lean enterprise and they may have issues where they find the efficiency of their cost base increases dramatically over the coming years. i.e. They MAY find that they didn't lock in enough cheap land to service the 5-10yr market horizon.

With this better value (today) BKG shares the same historic pricing volatility to CRST which (personal opinion) is an indication that CRST has more players playing with the price.

Despite all this, CRST is still one of my favourite companies out there. In fact, if the time horizon for the "closure of value" was the same - I'd choose CRST. However, it isn't hence why I've gone with BKG.

Finally, whilst this sounds like a contradiction, I may have paid a higher price in the short term for BKG at 2475. I would be lying if I said this doesn't make me nervous on the downside volatility. So, BKG is being actively managed (i.e. it has potential to affect my sleep).

[gargleblaster] 20/1/2015 18:18

monty - thanks for that - I did hear that GS were bullish on them - but I would love to see their reasoning if anyone has a link. Obviously GS (and Standard Life) take a rather different view from Jefferies!

[montyhedge] 20/1/2015 16:26

gargleblaster
Apart from BKG, Crest Nicholson is the one, best land bank South East England.
Figures 27th Jan, going to be superb with a bumper divided. Goldman Sachs said 75% rise in price next 12 months, that was last November 14. Of course DYOR.

[philo124] 20/1/2015 16:22

Cold weather, can't do brick/stone laying.

[rsharman] 20/1/2015 16:21

Does anyone know what's hit Bkg today Thanks

[philo124] 15/1/2015 09:19

Held off yesterday. JAG MOT, spot of lunch.

[gargleblaster] 15/1/2015 09:09

JPFD - thanks for the link.

Regarding other house-builders I would welcome views on what others consider attractive other than BKG of course!

[dr_smith] 15/1/2015 08:58

Looks like you've had a busy day Phil and it's not even 9.00 a.m. yet.
You may be wearing the red braces at the mo' but now you've time for lunch. ;-)

[philo124] 15/1/2015 08:39

Topped up.

[dr_smith] 13/1/2015 08:57

I have been a very naughty boy.
I've come unstuck before going over my quota for good portfolio spread.
I've just taken BKG from 100% of quota to 167%.
..gift horse..mouth..
if it goes t*ts up, I'll just blame it on my fellow threadees
- it's a win win ;-)
I can top slice later, take the cash from SIPP and get my Lambo'. :-)

[dr_smith] 10/1/2015 09:44

When 'expert' view differs to your own, you always wonder 'what have I missed' - or is info source not not a credible entity - most brokers then ;-) .
So, for some peace of mind on this Jeferies BLX (IMV) this view seems to have more balance (BLX conclusion confirmed). :

[jeffcranbounre] 09/1/2015 19:28

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Zoopla Property #ZPLA
Rightmove #RMV
LSL Property #LSL
Countrywide #CWD
Taylor Wimpey #TW.
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Persimmon #PSN
Crest Nicholson #CRST
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[philo124] 09/1/2015 19:11

Top up for ISA next week.

[scottishfield] 09/1/2015 17:10

amazing what these so called experts call sometimes, imo.

[r ball] 09/1/2015 16:56

indeed. sector sentiment poor. nat grid deal a game changer. as always: cash generation and dividend policy will focus mgt.

[essentialinvestor] 09/1/2015 14:41

And a few more, short term share price very difficult to call imv,
BKG can move rapidly in either direction, however it's the entire sector today.

[barnesian] 09/1/2015 14:28

I agree that this is a buying opportunity. Much more upside than downside now.