How high and how soon are the factors. It does depend on your timescale.
Give it 2-3 years and the new production will show through and be paid for. Meantime the price is low and the perfectly adequate dividend should be safe. The housing shortage is not going away, and unless Ibstock management fail to keep up with the very limited competition (unlikely) or invests in new materials that don't function properly or are unpopular (small risks I think), this investment will do for me.
I also hold the main competitor Forterra; hopefully they can't both make a pig's ear of the opportunities in front of them!! |
It always amazes me how touchy some people get over the expression of any slight concern on their baby investments. Of course, you are correct to a certain extent about Ibstock's energy hedging (or more accurately the art of wasting resources to protect yourself against the danger of having to waste even more resources), but the very fact you have to hedge in the first place is never a prime position to be in. One thing I will give you though is that you are entirely correct in your assertion that I should not be investing here: it was a clear mistake on my part, but I have never been a great fan of crystallizing losses, and especially not when I do think that Ibstock will eventually come good and give me some small measure of return. I suspect where we significantly differ is just over how high that eventual return will be. |
If you don't understand Ibstock's energy hedging or the barriers to entry for any competition, maybe you should not be investing here. But it's pretty basic and public with recent updates. Perhaps you could do more research before opining on the investment case? |
Possibly, though the worry is always going to be how high are energy costs going to go, and how easy will it be to pass those costs on to clients. For me, I think there is currently a glut of companies/sectors that are clearly undervalued and have a better investment case than here. |
Ibstock missing out on the general recovery since the drop early doors on Monday.
Now relatively very cheap IMO. |
The energy rises are sector wide, this share price drop seems overdone. |
 https://www.fool.co.uk/2022/02/17/9-5-dividend-yields-2-uk-shares-id-buy-right-now/A business with a solid dividend future?In a pre-pandemic world, Ibstock (LSE:IBST) offered a pretty hefty dividend yield. However, with construction projects having ground to a halt in 2020, it's not surprising the brickmaker had to temporarily cancel its dividends. Consequently, shares of this UK business crashed by 50% in March 2020 and still hasn't fully recovered.But despite it currently trading below 2021 levels, the business seems to be in a far stronger position. Looking at the latest trading update, revenue for 2021 is expected to have made a full recovery to £409m the same as in 2019. And according to management, EBITDA is also anticipated to be ahead of expectations.Dividends have since been reinstated, albeit at a reduced yield of 2%. However, with manufacturing capacity set to expand later this year, revenues, profits and, in turn, dividends could be on the verge of hitting new highs. That, to me, sounds like a buying opportunity.There are obviously risks to consider. Being a purveyor of construction materials, demand for its products are ultimately tied with the demand for new homes. If housing affordability were to suffer, the number of newbuilds could drop, undercutting future dividend income.Yet, despite this risk, I believe this stock could be set to make an impressive comeback. That's why I'm considering it for my portfolio. |
Interested to see that Vulcan Value have further increased their shareholding and can understand why as the gungho TU iof Jan 20 has not done much to the share price
They have a stable shareholder base. As far as I can see the only moves since 31.12.20 has been Ameriprise joining with 5.47% and Vulcan going from 6.94% to 9.72%.
I appreciate energy prices must be casting a shadow. In last year’s Significant risks in the 2020 A report input prices was way down the list and Climate change was the key issue.
In this A report we were told that quote he Group operates a policy of forward purchasing its energy requirements, which is successful in locking-in the costs of production to inform price negotiations with its customers.unquote |
I thought I had read that IBST were developing their own sustainable energy sources though not sure how that would be involved with powering brick kilns. Anyone else hear that? |
They will just put their prices up. The main worry I have is the government shutting down non-essential energy-intensive companies if there is a serious squeeze on energy resources. But the USA is sending us their (ironically very carbon intensive) LNG at the moment, hopefully that will forestall such a necessity.
Also think it likely Putin will not pull the trigger, because it would be a disaster for Russia to do so... |
That should be where IBST maybe have an 'edge' of their own. Good forward planning |
all brickies going to be squeezed by high energy prices once their hedges run out? |
Adjusted EPS in 2019 was 18.3p and the dividend 9.7p. I expect that kind of result going forward to be a base from which earnings will grow for all the obvious reasons (solid management, barriers to entry & tight supplier base (imports are expensive due to product weight), new production coming on stream, ongoing long term housing demand).
Ibstock was over £3 before COVID, and unlike some other businesses has not recovered its share price. This to me looks anomalous given their sound market position both now and in the foreseeable future.. |
i expect 16p eps.
The shares i keep buying look too cheap
tiger |
This is a quiet thread. No comments re the trading update and divi dates/price. Nice to see the rise lasted nearly a day !! |
Plenty of value in this stock but the same comment was being made 12 months ago. My suspicion is that concerns about the price and sustainability of energy supplies plus the absence of a decent yield are holding things back here. Think that we'll continue to see surges in the share price followed by profit taking until that situation changes |
Nice little breakout today, are people finally seeing value here? |
Amazing ! I suppose it has to be done as the country and the West is wedded to green wokery. If it increases profits its ok by me. 1940 - manana |
Forterra announced trading today.
High demand means low stocks which means good pricing in due course; in the very short term (for Forterra until January) margins are impacted by higher input prices, but from Jan, price rises will completely cover that. I expect Ibstock will be the same, but with price rises already in place (per their last trading update on 3/11).
FORT have managed their energy contracts well, as have Ibstock, so as long as the government does not have to limit industrial energy use (though again that is just short term - over Winter if the wind does not blow enough and LNG is hard to source), both companies will be doing very well as we get into 2022, and even better when the new production swings into focus in 2023; I see no demand issue in the medium term, as the UK market is obviously capacity constrained; and when the new production is running, imports will be outpriced.
One for the bottom drawer, for me. Well, two actually! :)) |
looking at the buy's and they do look like buy's then there are some big numbers going through but price is dropping but not enough for them to be sell's not even late reports from day before, I actually do think there is a big order being filled here and once the tr1 comes out the rise will follow ???? |
The plans for their Nostell factory are intriguing. UK Market leaders... |
Maybe. But it's just cheap at the moment... |
It would seem, judging by the current price, that they judged it about right when they chose a flotation price of 190p 6 yrs ago! |
FORT or IBST? ...or both? |
Ameriprise recently purchased BMO to add to Columbia Threadneedle so it is probably the joint holding |
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