Persimmon Share Discussion Threads

[dr_smith] 21/8/2018 10:20

No surprises, good or bad, even in impossible to guess market reaction.

It both amuses and annoys me that gov seemingly do little to faciliate more land for building/re-devlopment. Offering perks to first time buyers etc doesn't address the supply/demand imbalance. I haven't seen anything of the proposed (implemented?) new tax for land holders (for long term gain) and would personally like to see more brownfield sites, shoddy areas, derelect ex-industrial areas and the like re-purposed, even though "site clearance" is often a bone of contention/complex/higher cost.

From the following comment, gov are dragging their heels. If gov acted as per policy, it would ease supply, helping provide sustained growth in housing units:


"LAND
... Despite the National Planning Policy Framework requiring planning authorities to plan and deliver sufficient land to fulfil their local housing need for the next five years, the industry remains constrained, in particular, by the number and variety of separate locations that are released for the construction of newly built homes. Should this issue be addressed, the industry will be better placed to expand output to meet customer demand across the UK. ..."

[cwa1] 21/8/2018 08:40

Oh well, put me down for a few then......

[andyadvfn1] 21/8/2018 07:59

Up today on theses results

[whatsup32] 21/8/2018 07:58

Good luck to you boys. I’m v. Tempted

[sogoesit] 21/8/2018 07:55

Flat imv. There's general scepticism about the housing market and prices.

Roll-on the 9%+ yield.

(Why is operating margin "down" when it says up by 210 basis points, whatsup?)

[whatsup32] 21/8/2018 07:48

Margin 29.7% down .3% ? Nothing major . Any ideas how it will open

[sogoesit] 21/8/2018 07:23

Improvement across the board even extending to selling prices, just.
Net free cash generation down about £44m half-year-on-half-year.
Capital returns re-confirmed to 2021.

[whatsup32] 20/8/2018 14:34

SP has been negative since July.results.
3 year dividend guidance of 235p is unbelievable
Yielding 9.5%

Tempted but will leave it until tomorrow for better forward guidance.

Have an uptick Dave,
but if you’re wrong I’ll take it back tomorrow

[dr_smith] 20/8/2018 14:05

Well 1.22% down today could be indication, though some peers down 1% too, so probably not results related/anticipated.
Gut says results will be good/favourable with good (but not record breaking) outlook and share price activity will be subdued bearing in mind August is quiet time of year for housing market.
Forward EPS of builders in general is currently several percent higher than 12 months ago, so don't understand the low sentiment and hoping/expecting a bounce back, but not holding my breath for tomorrow, I'll just sit quietly for longer term.
IMO :-)
Dave.
P.S. What do I win if I'm right? ;-)

[whatsup32] 20/8/2018 14:00

Expectations was lowered at the last announcement. Management said housing demand had peaked. if confirmed tomorrow the share price should drop but that would depend if the margins have dropped significantly from the current 30% and housing demand going forward.

SP currently indicates negative news

[andyadvfn1] 20/8/2018 13:24

Any opinions, views on what we can expect tomorrow and the share price going forward?Around 20% of the year highs and not far away from the year low.

[whatsup32] 19/8/2018 19:26

Announcement Tuesday. Should give indication to housing market in general

[skyship] 13/8/2018 08:32

Boris has a go at Persimmon in his column in today's DTel...sp falls 1%...

[rsharman] 23/7/2018 22:36

Anybody know why the big drop today?

[whatsup32] 23/7/2018 17:47

Bad day indeed, I haven’t found any news releases to warrant today’s drop. Yielding over9% . Who knows what’s up.:)

[micos] 23/7/2018 15:21

so, what's up today??

[whatsup32] 06/7/2018 14:48

Quarter page write up in The Times business section.pretty much repeating the trade update ending with a quote from analyst Canacord “reassuring update” reiterate BUY

[sogoesit] 06/7/2018 07:20

Thanks, no worries.
Sure, yield criterion is nuanced as (one) measure for valuation.

[dr_smith] 05/7/2018 14:48

Sogoesit: No apology needed. I only mentioned as an allegedly real Doc on this BB once bad mouthed me for misleading - it wan't even a contentious comment.

Slightly OT - stock selection

I look at potential cap gain and div for stock selection.
I see divs as a vehicle for returning unrequired cash. If company can capitilise on its position by usig that cash to enhance ROI, by utilising what would otherwise be a div, I am happy with that.

I have taken low risk (or lower risk then own) for sisters investment..and have been less succesful.
Case in point, sbry. Old history now, but my point is, is it better to invest in a regular div payer in a competetive static market, or a zero div payer in an expanding market.
OK, generic comment, but my point is dividend IMV, should not be the driving factor on stock selection. IMO :-)
I do acknowledge, div rate (and/or expected div cover)is a nice long term sign post from BOD as to confidence for medium - long term future.

Tax of course varies between cap gain and divs, but I see that as a separate question.

[sogoesit] 05/7/2018 13:47

Ok, thanks for feedback Dave (apologies for the Dr),
Yes, I am long term too as I've held these since about 2010/2011.
Agreed on the sentiment and "calling the top" issues.
Personally, for PSN, I consider the special dividend as committed well into 2021. Note that, since the scheme was initiated, I think they increased the payout twice.

[Yield is my basic measure for the "low risk" income part of my investments so it is central to my valuation decision-making but I like to see it backed by cash accumulation. I guess we can disagree on that criterion ;-).]
Best of luck.

[dr_smith] 05/7/2018 10:35

Sogoesit;
No email reminder yet but just read the article in shares magazine.
My style is to follow fundamentals rather than sentiment, so a medium to long view.
Theoretical passing of peak, does not mean off-peak margins are to be snubbed.
I don't hold with using dividend yield as a measure, and the sector has been supplementing these with special divs.
Special divs, means ROI is effectively higher.

It mentions
"There are also undoubtedly strong dynamics behind the UK housing sector with the supply of new homes still failing to keep up with demand."

If a company can not prosper in such an environment then there is no hope for any company, whatever sector.
My gut tells me that whilst growth has to be finite, that does not mean returns for investor diminish. e.g. They can do the same with less capital, higher ROI.

If folks see an article on reduced sentiment and follow it, it becomes a self fulfilling prophecy. Also people have been calling "the top", or "the bubble" for years.

Even if PE ratio degraded, most builders still beat most other co's / sectors in the FTSI.

I remain a LTH.
All IMO :-)

Dave.
P.S. Not a Doc.. middle name Russell

[sogoesit] 05/7/2018 09:58

Dear Doctor, you may be right, and I agree, but market sentiment looks poor. I don't care, to a large extent, as I'm a long term holder of this stock for income having recently accumulated and don't see a near term change in market fundamentals.

However, the lead feature in this week's Shares Magazine is titled "Housebuilders - Farewell Mega Profits?"
I cannot post the article as it is digital but the conclusion is quoted as follows:

"The sector is struggling which suggests investors are starting to get nervous about housebuilder's prospects. We're very cautious about the sector and believe you should think seriously about taking profits.
Yes, these companies could still generate dividends in the near term and still make a profit - but the potential for a significant drop in profit makes us feel this is not a sector to own at present. Negative sentiment could be the overriding force and drag everyone down.
Get out, wait until the market has had time to price in lower earnings and there has been a natural rotation for investors out of the sector; and only then potentially consider buying back if valuations have dropped to really attractive levels."

This begs the question, in the context of PSN, of what a "really attractive level" of valuation is in a market that is under-supplied and still growing.
A similar market cynicism prevailed with Shell (RDSB) about 2 years back when its yield was about 10%. Buying then saw a double within two years!

On the company's payout view to 2021 and a 9%+ yield this is currently "an attractive level". If it gets to a 10% yield (2350p) then it will be even more attractive!

Further, if demand changes, I would think housebuilders' managements would restrain building. As in fact BKG have intimated for the Central London area.

[dr_smith] 05/7/2018 09:14

I like the following bit:
==========
We expect continued improvement in the Group's underlying housing operating margin in the first half of 2018 building on the performance of the Group in the second half of last year (2017 H2: 28.8%). Despite inflationary cost pressures, disciplined cost control and continued efficiency savings have supported this margin progression.
=============
Given recent poor sector sentiment no caveats on lines of:
...expected increased margins now tempered by rising materials costs and labour shortage post brexit.
It actually states.."Despite inflationary cost pressures,"

So.. we can seemingly relax..and that likely can be read scross for sector (along with BVS today), and BKG warning taken in context of being London centric, so not a true sector barometer.
IMO :-)

[whatsup32] 05/7/2018 08:28

Absolutely delighted

[sogoesit] 05/7/2018 08:28

Sure, why not ;-)?
Where else can you get 9%+ yield with visibility?