Crest Nicholson Share Discussion Threads

[1gw] 07/4/2017 12:15

Yes, 18.5p is quite noticeable isn't it? Dividend yield is one advantage Crest does have over Redrow at the moment, for those interested in comparisons.

[pillion] 07/4/2017 11:09

Yep; divi paid in this morning

[wilkie_hk] 07/4/2017 11:07

Well, I cashed in a proportion of my holding at 550p on Wednesday to realise a capital gain for the tax year. I firmly believe that we will see £6 again by March 18 (housebuilding shares traditionally outperform in 1st quarter). Once 30 days are up I might buy back if the share price and ftse level are favourable.

[johnroger] 07/4/2017 10:28

Payday today

[pillion] 06/4/2017 20:25

Feeling well Edified now TE

When I was at Primary school They taught us that London is the Capital of the World

I still believe that !!

[the_equaliser] 06/4/2017 20:07

Just for your edification Pillion
I know a council contacting landlord in midlands to move tenants out london
My friend in the landlord - several calls were made to him

[pillion] 06/4/2017 13:35

Yep !!
London will soon be a Ghost Town

[bigbertie] 06/4/2017 11:08

Research by Savills reported in Telegraph on Wednesday says 25,000 of 60,000 homes "being constructed" in London last year are still unsold. Number of housing starts in London forecast to fall to 21,500 this year which implies homes built in 2020 will be only 18,000. Forecast completions this year forecast to be a record high of 46,500.

[creative_accountant] 06/4/2017 10:40

Crest cut from overweight to neutral by JP Morgan this morning, whils Redrow upgraded to overweight- it's top pick in the sector. No surprises there then!

[pillion] 05/4/2017 21:01

CRST still my largest then HSTN followed by TEL & HOC

[1gw] 05/4/2017 16:14

I've just taken some profit at 548p. I was hoping for a general sector boost from either RDW or GFRD offering for Bovis, but both have now withdrawn (at least for the time being).

After today's sale I have Crest and Telford neck-and-neck as my biggest portfolio holdings.

[pillion] 04/4/2017 11:10

Has Crest boiled over ?

Have the big boys gone against them because they upped their pay too much ?

Are we in a downward spiral ?

Questions questions........

[1gw] 29/3/2017 08:47

I agree a lot of disclosed short positions are probably hedging positions against bets elsewhere in the sector or the market (particularly if they are held by "hedge" funds). But companies will still adjust those hedges according to their view on the company/sector/market. So I think it's still worth tracking what's happening in aggregate on any particular company I invest in, because the volumes involved in short-selling relative to average daily volumes are often sufficient (I think) to influence the share price.

So seeing Millennium move from steadily increasing to steadily decreasing would be a bullish sign for the share price in my opinion, and vice versa.

A curious thing about Crest Nicholson is the relatively large shares on loan position. According to Euroclear it averaged 17.6m shares (nearly 7% of the shares in the CREST system) in February and has been between 13m and 21m shares since January 2016.

So although it is possible (perhaps even likely) that some of those shares on loan are not for shorting purposes, I wonder if the declared shorters are really just the tip of the iceberg, in which case a short squeeze could be quite spectacular were it to happen.

[pillion] 28/3/2017 23:18

These short accounts share a trait in common - the majority of them lack any completion

[pillion] 28/3/2017 23:06

Yes, I think they are technical quasi protection moves

[creative_accountant] 28/3/2017 22:53

I would take disclosed short positions with a pinch of salt; they are most likely delta hedge short positions and as such are not a bet on the movement of the share price but a risk mitigation tool that needs to be continually adjusted which is why you have noticed them constantly evolving.

[1gw] 28/3/2017 16:08

Disclosed short positions.

Millennium appears to have taken advantage of the fall in the share price on Friday to reduce it's short from 0.88% to 0.71%.

[creative_accountant] 27/3/2017 19:37

I hadn't noticed the new broker coverage so thanks for pointing that out, but sadly I feel CRST will now continue to under perform the sector as it has done over the last two business days whilst they ignore shareholder disapproval of the "easy" remuneration vesting criteria.

The worrying thing is if CRST feel single digit profit growth is a stretch target than that says alot about their future profitability and how they see themselves performing.

Redrow is not catching CRST in terms of share price and I believe, with its stronger EPS growth, it will soon overtake CRST. For its financial year ending June it will report C. 66p EPS which is broadly what CRST is expected to report for its own 2017 period ending 4 months later in October.

After that with an improving ROCE and higher level of retained earnings if market conditions remain stable there is no doubt RDW EPS will accelerate well ahead of CRST and this seems to be a view backed by the board of RDW and indeed CRST; CRST see single digit earnigns growth as a stretch target whilst RDW stretch target is far more ambitious with an upper bound 92p EPS for 2019 for full LTIP vesting.

For a company that is supposed to be balooning revenue to 1.4 bn and ramping up volumes to 4000 units the fact that the board of crst see single digit profit growth as their stretch target is very worrying and it does not add up.

[1gw] 27/3/2017 12:17

Crest underperforming the sector again today, as it was on Friday, so there seems to be some hangover from the publicity around the remuneration vote.

Another broker coming out unchanged though. Barclays reiterates "overweight" and 628p target.

[1gw] 24/3/2017 21:45

Thanks for the links.

The link shows no earnings revisions for Crest Nicholson in March and 1 downgrade in February doesn't it, so nothing at all current in terms of today's shareprice decline? As I read the chart, the reason the "low value" line shows a drop in the 24th March period is that they have added an estimate from a new analyst (so the grey bars show 6 unchanged estimates rather than the 5 unchanged estimates for the previous period) which is in itself unchanged from the previous estimate from that analyst, but is the "low" one of the set of 6 and so appears on the "low" line.

Redrow may well be a better investment than Crest. I don't know because I haven't studied Redrow in detail. I do however think there is a reasonable chance that Redrow get themselves drawn into a bidding battle with Galliford Try (and maybe even someone else) over Bovis and I don't know how the Redrow shareprice might react to that in the short term.

[creative_accountant] 24/3/2017 20:22

Brokers have already started to downgrade EPS, Revenue and PBIT as seen here on the consensus revisions page. These will drop further if other brokers follow suit:

hxxp://www.4-traders.com/CREST-NICHOLSON-HOLDINGS-12583133/revisions/

Compare this to Redrow who's figures have all been upgraded following their more bullish perspective:

hxxp://www.4-traders.com/REDROW-PLC-9590147/revisions/

You will also note that Redrow trades on a lower forward P/E due to its expected superior growth, despite reporting 4 months earlier than Crst (June year end vs Oct year end).

The decision to cut the LTIP vesting criteria was also accompanied by a luke warm trading update at the AGM and an argument that 8% profit growth was a stretch target which spooked investors given precious guidance.

With insider information the fact that the BODS and remuneration comittee see a mere 8% growth in PBIT as a stretch target suggests they expect not to grow anywhere near as fast as even the consensus EPS figures suggest on the above link, which is why this is starting to retrace significantly and brokers have already started to downgrade the figures.

Redrow on the other hand have a much more bullish LTIP vesting criteria based on achieving a whopping 82p EPS in 2019. I know which stock I now prefer and think will outperform.. not this one!

[1gw] 24/3/2017 17:27

This (the ltip pbt criteria) is not new news though. The annual report which contains the information was published quite some while ago. The only new bit is the result of the vote which has perhaps given the relevant section of the annual report a bit more exposure.

I'm not aware of any brokers downgrading their eps targets. Can you provide some backup for that statement? In fact the only recent broker rating I've noticed has been today's reiteration of "overweight" from JP Morgan. Now since their previous price target (from November) according to the N&P site was 550p that suggests if anything they might have increased their target if they are reiterating overweight at the current price.


And according to the FT the fact that the profit targets looked "undemanding" in light of brokers eps forecasts is one reason the ISS shareholder advisory group recommended voting against the report.


I think it more likely that today's fall is largely profit-taking after a good run, a mildly unenthusiastic AGM trading statement (relative to other builders' recent updates) and a bit of negative headline news on the remuneration vote.

[creative_accountant] 24/3/2017 17:10

No surprise to see a sizeable drop here today on the back of the very disapointing ltip vesting criteria downgrade. Even the stretched targets suggest crest is not on target to reach broker consensus profits over the next 3 years, or indeed if it is the ltip criteria are far too easily achievable. Either way the downgrade has led brokers to downgrade their own eps targets which has eroded the implied value here and thus share price. This issue could well overshadow crest for some time to come and thus redrow and tef look superior options at current levels.