Persimmon Share Discussion Threads

[1 nhs] 27/2/2020 07:44

Mankind is facing a pandemic of unimaginable magnitude and suffering, combined with a world drowning in debt, that has zero chance of being repaid.

It is absolutely vital that you put family first , particular children

We are not far off, forced sellers of ALL ASSETS, (bar Gold , for immediate delivery)

Paper gold, might as well be flushed down the toilet.

It’s about to turn on a sixpence.

Governments will furnish the world with yet more, free cash, but they can’t control the mindset of the people, or the virus.

[grahamg8] 27/2/2020 07:44

Payout rate continues into 2021 but as a new CEO will be appointed his/her first task will be to review and confirm 2022+ plan. Don't panic Persimmon are still doing well and have lots of cash.

[sogoesit] 25/2/2020 11:03

Virus contained in China and mainly Hubei Province.
Latest sitrep from WHO:

China has a population of about 1.5bn and there have been 2,595 fatalities to date there.

Will be interesting to see TW tomorrow as DR Smith points out.
Note that BKG increased its capital return over the next two years by nearly half a billion announced yesterday:

£500m for BKG is about £4/share which equates to about a 7.5% yield at current share price

Since our guidance for payouts runs out next year the major news I'm looking for is a new 2 year or so payout guidance on Thursday.
Hopefully to match a current yield of around 8%+ (for risk) against BKG's "risk".

[dr_smith] 24/2/2020 15:27

Cupra. I'm inclined to agree, all sectors hit, even though HB's are not reliant on imports/exports from more severely affceted countries, maybe for fittings.
If you think it is out of propoartion, that lower share price is yours to exploit, but hesitate myself, because if virus does hit (workers), need some cash to see it through.

[cupra kid] 24/2/2020 14:22

So the market is down circa 3% based on the coronavirus maybe worsening. As much as it's very sad to hear of anything like this and the distress it causes to many people I can't help but think it's being blown out of proportion.We have 13 confirmed cases in the UK and that's out of 60 million people that live here. No one has died but we do have 600 deaths per annum due to flu. Coronavirus as explained to me by a doctor has similar symptoms to flu and if Joe Bloggs got it, then yes they will be poorly but will recover. Just like flu, Coronavirus will be worse in the elderly, young and those with underlining health conditions. I don't know the exact figure of affected people in China but I imagine it to be a drop in the ocean compared to the amount of people that live there.

[dr_smith] 23/2/2020 10:42

I see:
wed tw finals
thurs psn finals (as Sogoesit mentioned above)
so together they should give strong message re HB's.
The outlook should be more positive than last few years with Brexit/election out of the way...maybe caveat re need for immigrant workers that has been in press in last week.
IMO
Dave

[owenski] 21/2/2020 10:03

Thanks for the post Sogoesit

[effortless cool] 21/2/2020 09:17

Or maybe that's an anti-pounding?

[effortless cool] 21/2/2020 09:17

Wow! Taking a reverse pounding today.

[sogoesit] 21/2/2020 09:02

With results within 7 days always possible some "profit taking".
Pre- or post- results, who knows! Depending on what the expectations are.

This commentary in SharesMag 20 February:

"Buy Persimmon which yields 7% and is getting its house in order

We think housebuilder Persimmon (PSN) can close the valuation gap on its rivals as it repairs its reputaton and improves its building practices amid robust conditons for the wider sector.
The housebuilding space has enjoyed good momentum since the December general election delivered a measure of political certainty arguably not seen since before the Brexit vote in June 2016.
Online property site Rightmove (RMV) recently signalled a bumper me for house prices this spring as pent up buyer demand comes through – this will coincide with the all- important selling season for the housebuilders ac ng as a further catalyst for share prices.
Persimmon may provide some colour on this when it reports full year numbers on 27 February and in a subsequent trading update scheduled for 29 April.
We believe it is not a stretch to argue that Persimmon with its higher returns and net cash should return to a lower dividend yield than Barratts and Taylor Wimpey as was the case in 2017.’
For Persimmon to trade on the same yield as Barratts it would need its share price to rise by more than 30% to approximately £43.
The reasons for Persimmon lagging behind in recent times is the construction and customer care issues which led to murmurings that it might lose its eligibility for the Help to Buy scheme which has been highly lucrative for the industry.
As it looked to address these problems, the company curbed the number of homes. The main risk to our positive stance on the shares is that the company’s e orts to address these problems lead to significant sacrifices on its level of returns.
For now, Persimmon continues to generate higher margins than its rivals and has an exceptionally strong balance sheet, even by the standards of a sector which is awash with cash. The company has an £844m net cash position.
It also bene ts from limited exposure to the south east where valua ons are more stretched, with lower average sale prices than peers and a good track record of acquiring land at the right prices.
Based on Jefferies’ forecasts Persimmon is on a 2020 yield of 7.3%, while Barratt Developments,
its similar size, is on a yield of 5.5%.
The investment bank comments: ‘We see Solid foundations: Dividend is underpinned by
£844m net cash position.
PERSIMMONBUY (PSN) £32.15
Stop loss: £25.72
Market value: £10.4bn"

[owenski] 20/2/2020 15:19

PSN down by less than 1%, and that's a pounding?

Would 2% be Armaggeddon?

[cupra kid] 20/2/2020 15:04

Taking a pounding???? Wow, some statement that!

[arja] 20/2/2020 14:56

builders taking a pounding today for some reason but maybe just a pause for profit taking as nothing goes up in a straight line I guess

[sogoesit] 19/2/2020 10:50

Thanks micos.
Thanks Brummy, too, for that site.

[brummy_git] 19/2/2020 06:23

All the latest homebuilder valuation multiples and KPIs can be downloaded from here, including PSN

[micos] 18/2/2020 08:19

Good post sogoesit

[sogoesit] 06/2/2020 21:55

Hi biggerpicture:

Whats the trailing yield?
It's the past year's committed payout (FY2019 - £2.35) divided by the share price
The forward yield is forecast payout divided by current share price
FY2020 is also £2.35 forecast payout. FY2021 falls to £1.10.
Will there be new guidance for payouts in upcoming results? My guess is yes as their competitor BKG has recently announced.
I haven't compared others in the sector recently. BKG have a buy-back so, as I said, this was a variable programme and provided less certainty so I sold out.
TW, next highest ROCE (?) trailing yield is about 3-1/2%.
BDEV, ROCE about 16% yields 3-1/2% too.
Note that PSN FY2021 forward yield is currently also 3-1/2%! (Will it surprise with a higher payout?).

Is 3-1/2% forward still "good value"?
It's probably no longer strongly "undervalued". (I think £32 looks a reasonable near term, pre-results, limit on the share price for accumulation with £34/£36 tops pre-results).

Hope this helps.

[thebiggerpicture] 05/2/2020 22:12

Hi sogoesit,

Investor in Kier here. (and DTG, so get the straight line thing)
Can you explain in more detail why you think Persimmon is undervalued?
How do you calculate trailing yield?
How does the trailing yield of persimmon compare to the other shares of the sector?
{to compare whether its cheap compared to its peers}


PS: Feel free to check out my Youtube channel

[cupra kid] 05/2/2020 07:28

RDW & BDEV half year reports look decent, good for the sector, sentiment and outlook.

[dr_smith] 04/2/2020 17:02

More ATH's for PSN, RDW, VTY and BDEV.
There seems a shift in sentiment in a number of sectors.

[sogoesit] 04/2/2020 09:14

Been undervalued for a while. What (trailing) yield gets it near reasonable value...
7% > 3357p
6.50% > 3615p
6% > 3916p?

Prospective payout on results increasing, decreasing or remaining the same (guided runs out in 2021)?

Some (undervalued) shares do go up "in a straight line", btw. See DTG.
It's the time view issue to pay attention to (ie "not forever").

(Brokers today vary between 3250 and 3310).

[cupra kid] 04/2/2020 08:28

Got to have a pull back at some point as nothing goes up in a straight line. That 2800-2900 level should be support now though.

[sogoesit] 04/2/2020 08:23

£31 breached.
(IC journo dissed the stock at weekend)