Persimmon Share Discussion Threads

[tialouise] 18/8/2023 14:51

Perfect time to buy then , when all is doom and gloom........

[fuji99] 18/8/2023 13:22

This sector and retail in general will be struggling this year and possibly next if mortgage rates stay high and some geopolitical issues(Russia/China/Taiwan) start affecting economies (redundancies, people selling quickly if they cannot afford to pay their mortgage anymore etc.). All this will cause house prices drop to attract prospective buyers which is another negative to this sector.

[sikhthetech] 16/8/2023 13:38

ben,

New build flats/properties fell substantially during GFC. Some down 40%.

The reason is because New Build properties command a premium, which can be 20%. When a housing crash happens, like it did during GFC then those same new build properties can easily fall 40%, peak to trough. This is because the premium falls or is reduced substantially as properties become valued on par with 'existing' properties.
Wipe out the 20% premium and add on the general fall of 15-20%, as you quoted, and you get some properties falling 40%, peak to trough.


Those who bought new builds recently, especially using schemes like Help to Buy equity scheme and those who rushed to buy before SD hol ended in Sept 2021, are most at risk of losing around 40% of their home value.

[sikhthetech] 15/8/2023 20:14

Savills backing up the opinion that Landlords selling up
Those selling this year making around £10k less than those who sold last year.
153k properties sold by Landlords in 2021-2!!!


Number of landlords selling up in UK grows as mortgage rates surge
Those who sold buy-to-let this year made £10,500 less than those who did so in 2022, separate data shows


"Estimates showed that 25,000 homes in UK were sold by UK landlords between April and May, compared with 22,000 in the previous two months."

A growing number of landlords have sold up as rates on mortgages surge, according to data that showed tenants facing sharply rising rents amid a squeezed housing market.

Estimates by the estate agent Savills showed that 25,000 homes in UK were sold by landlords between April and May, compared with 22,000 in the previous two months.

The sell-off appears to have gained pace since the the height of the Covid pandemic, as landlords started to feel the pinch of rising costs and interest rates, which made new buy-to-let mortgages – particularly interest-only contracts – more expensive to repay.

Official figures from HM Revenue and Customs – based on capital gains tax data – suggested that landlords sold 153,000 properties in 2021-22, 8.5% more than originally estimated.

Savills said the data pointed to “an increase in buy-to-let landlords selling properties in the past two years, and the potential for properties to be leaving the sector”.

[sikhthetech] 15/8/2023 20:01

Benjones,

"The last 2 housing recessions in the UK have been 2007/08 (2 year downturn, and yes a severe one)."

The downturn has only just started. I think the UK housing recession will be severe and the peak to trough to peak will be some years down the line, def not 2 years.

During GFC, I saw some properties fell 40%, as per my previous comments.
I'm expecting similar this time.


The crucial point is the Help to Buy scheme was introduced in 2013, which helped HBs make hundreds of millions and helped the housing market surge.

The Help to Buy scheme ended Oct last year. So lack of govn schemes to give housing market a boost.

[benjonesinvestments] 15/8/2023 15:06

Porsche, out of interest, where do you get 7 year cycle from?

The last 2 housing recessions in the UK have been 2007/08 (2 year downturn, and yes a severe one). Prior to that there was the housing recession from 1989-92 (more like a 3 year downturn).

I don't see a repeat of 08 but fully expect a recession. Homebuilders tend to do well during recession, simply as a function of lower rates. Homebuilders did well from 1989-92 despite a 20% drop in home prices, just because rates fell from around 14% to 6% and mortgages become more affordable. I would expect a recession this time around to net benefit homebuilders.

The homebuilders were all leveraged in 08 and now have 0 debt. There's no need to raise equity if you have no debt and 20% of your market cap in cash. PSN also have inventory worth their market cap. Even if you take a haircut on the inventory you can see the B/S is extremely safe and not in need of equity financing, even during a period of distress.

From my view, I think people are interested in buying now because the share price has dropped >50% despite the bad news likely impacting 2 years or so of profits. The valuation would only make sense if every year going forward for PSN saw profits at 50% of 2022 (which I think is far too pessimistic). It's just way too cheap vs long term FCF generation.

I can't predict the short term but I have a very high long term conviction, so it is logical to buy now, even if I get chances to buy lower in the short run.

[adamb1978] 14/8/2023 14:14

Any views on share price weakness over the last few days? Possibly some profit taking after 20% uptick from early July, but wondered whether anyone had seen any macro info

Inflation data on Wed (and wage data tomorrow) will hopefully provide another boost to PSN

[sikhthetech] 14/8/2023 14:08

benjones,

"Sure it's possible that over the next year it gets a bit worse before getting better, but I don't see that as an issue for long-term performance. It would just present a better opportunity to buy"

HBs will present an opportunity when all the challenges are factored into the share price but I don't see it at the moment.

Currently, I see HBs as good trading but not a buy.

[porsche1945] 14/8/2023 09:29

Weird people buying into builders one year into a housing market decline, duh. These cycles usually last at least 7 years. Shares don’t go down in a straight line but it’s not far off this time, charts look weirdly similar to 08, all the builders had to raise capital in 08/2014 period ( Taylor wimpey 4 quid to .18p at one point ) if these follow same pattern as back then should see about 5.50 second half of next year, will sit there for years. US and Europe will recover but U.K. different set of issues, just in high speed unmanaged decline, political basket case foreign investors won’t touch, until someone has the balls to reverse brexit there’s zero hope.

[beckers2008] 13/8/2023 19:37

sT & Sikhthetech,

What's the share price for PSN going to be in 3 months time.

'Sikhthetech'
When are house prices going to crash 40% peak to trough?
You've been banging on about it for 5 years and House prices have gone up materially since your first appearance in October 2018, lol, just lol!

[sikhthetech] 13/8/2023 18:43

House prices in Scotland now falling. 1st time since Covid.



House prices in Scotland fall for first time since Covid.

[sikhthetech] 13/8/2023 18:40

Benjones,

"Sure it's possible that over the next year it gets a bit worse before getting better, but I don't see that as an issue for long-term performance."

"As for cost efficiency measures, I'm not sure why that flags so much concern? I would hope that any sensible CEO would be prudent with costs in good times and bad."


I'm expecting things to get worse for HBs before they get better.

Especially given, Help to Buy only ended recently. That's a huge loss going forward.

The doubling of incentive levels will cost them money.

Falling house prices.

They've said they are looking at cost cutting in the 'NEW' challenging environment so I think there will be a lot more cost savings coming.

Sales slumped.

[garycook] 13/8/2023 11:33

finkle, Persimmon Historic Yield - 7.08%
Dividends Declared in Previous 12 months
Year End Type Announce Date Ex-Dividend Date Payment Date Dividend
12/2022 Final 01-Mar-23 13-Apr-23 05-May-23 60p
12/2023 Interim 10-Aug-23 12-Oct-23 03-Nov-23 20p
Total: 80.0p
Dividend Yield =
Total Dividends
Current Share Price
=
80.0p
1129.50p
= 7.08%

[adamb1978] 13/8/2023 07:55

What do you mean by capital repayment? Repayment of what? Debt? They have around £500m net cash from memory so there's no need to repay any debt, or indeed take any more on. This sector should run with net cash levels such that the share price doesnt tank in any market weakness and force companies to do rights issues at rock bottom prices

[finkie] 13/8/2023 07:24

Hi the dividend full year is now 60p so around 5% which seems sensible under current conditions. What is proposed capital repayment and how much is left to repay or is it an ongoing payment like the dividend? Thanks

[beckers2008] 11/8/2023 13:04

'Sikhthetech'

You stated on this BB that 'what I post on here influences the share price of PSN'

It's easy to check.

When is the house price crash, 40% peak to trough going to happen?

You've only been banging on about it for 5 years, lol, just lol!

AdamB1978 sums you up nicely.

[sikhthetech] 11/8/2023 12:54

SteMiS,

"This is a £3.6bn mkt cap company. Nothing Sikhthetech says will affect the share price"

EXACTLY.

I believe...
if bull points can be countered then it makes the bear case stronger.
if bear points can be countered then it makes the bull case stronger.

Bull/bear. It's what makes a market.



Yesterday, I mentioned the exact same re opinions on PSN and other ftse 250/100 shares to another poster.
Excerpts from my post yesterday.


sikhthetech10 Aug '23 - 15:27 - 20166 of 20173 Edit

There's nothing wrong with anyone ramping/deramping or posting an opinion, one way or another.

The crucial judge of whether those opinions are right is whether the company/sector newsflow back up the opinions.
An investor should aim to get significantly more opinions right than wrong.
If you can't do that then you're a failed investor and might as well stick to premium bonds.

<...>

So what about other shares I've expressed an opinion on? Ftse 250/ftse 100 shares, so they are impacted by newsflow and not PIs manipulating the share price

<...>

PSN/TW - expressed my opinion in 2022 that I wouldn't buy any housebuilder because of challenges that I listed, my target was 1300p-1500p. The share price was around 2200p, now 50% lower and within my target range.


<...>

Housing market:
In June 2021, months before the BoE even started raising interest rates, I expressed my opinion that interest will need to rise due to inflationary pressures and listed various challenges facing the housing market.

The company/sector newsflow has been similar to the challenges I posted. The BoE started raising interest rates months later. The Housebuilders newsflow have also stated the same challenges as I was posting.







As to Becker, check for yourselves what he is accusing me of. It's easy to do.

[beckers2008] 11/8/2023 10:12

ajb,

Your post does not get away from the fact that the troll 'Sikhthetech' stated that 'what I post on here influences the share price of PSN'

To state this is utter madness and clearly demonstrates that 'Sikhthetech' is clueless with Zero credibility.

Do you disagree ajb?

SteMiS, you haven't answered my valid question?

[belzoni] 11/8/2023 09:43

https://www.proactiveinvestors.co.uk/companies/news/1023251/uk-mortgage-payment-shortfalls-jump-as-higher-interest-bites-1023251.html?rel=scroll

[belzoni] 11/8/2023 09:40

Would that be the bulls or the bears?That really is head in the sand mentality.I personally don't see the optimism at the moment but I read fair points from both views

[adamb1978] 11/8/2023 09:35

Guys

Just put the time wasters on filter and don't given them the attention which they're seeking. Take away their oxygen and they'll die. By responding to them, you're providing them with what they're looking for, and will cause htem to hang around longer.

Adam

[benjonesinvestments] 11/8/2023 09:33

Sikhthetech, you're basing the company valuation on next years earnings alone? I think we view valuations very differently.

Do you have any views on net income or FCF figures for Persimmon going forward?

As for cost efficiency measures, I'm not sure why that flags so much concern? I would hope that any sensible CEO would be prudent with costs in good times and bad.

Every homebuilder is pulling back on completions which makes sense given lower demand due to higher mortgage rates. However, the share price has already declined more than 50%. It's well priced in. The valuation now assumes that every single year going forward will be like 2023 (completion figures down 30% and margins down around 30%), which is too pessimistic. At some point, completions will return to normal and lower rates with longer mortgage durations will resume demand and normalise margins.

Sure it's possible that over the next year it gets a bit worse before getting better, but I don't see that as an issue for long-term performance. It would just present a better opportunity to buy