Segro Share Discussion Threads

[jonwig] 16/11/2007 08:46

pf - so-called 'earnings' included gains from asset revaluation as well as rents.
Next time round, there will be, I imagine, big losses from asset write-downs which will outweigh any rental income.
Don't use P/Es when valuing real estate companies!

[pictureframe] 16/11/2007 08:42

With a PE of just 1.8 hasnt this fallen to a ridiculous level? I am tempted to load up large but I must be missing something ?

[jonwig] 05/11/2007 07:23

sscrabble, I'm not disagreeing with you, except on the issue of timing.
I already own some RE shares, and intend buying more - including possibly SGRO.

By the way, post #25, the discount on IPD is 32% (137.3p, 93p) not 40%.

[sscrabble] 04/11/2007 20:06

Well at least someone agrees with me !! - so the question is who else besides the companies above would be in the pot as a good purchase based on big discounts to NAV plus a healthy and continuing dividend

[chris79] 04/11/2007 19:30

The market always overreacts and the ride up and then down with property emphasises this more than anything. I agree with all of sscrabble's recent posts, these really are too cheap, property in general and Segro for one in particular. Admittedly i am in many stocks at about 10-15% more than the current levels, but these really are great value. One other worth looking at is Invista Property Fund which only put out its NAV last week so no-one can accuse it of being out of date and not a real value etc. The discount on them? A mere 40%! And a very nice dividend yield as well.

[sscrabble] 02/11/2007 20:34

yes - I can understand the worries, but thats my point - the shares can easily survive a crash - the companies at these share prices are already worth way in excess of any price the properties might fall to - and they have rents agreed for years that will keep them with eps at least in line with inflation

[jonwig] 02/11/2007 16:33

ssc ... yes, some are buying back (BLND, almost daily).
Some are conserving cash (or borrowing facilities) to enter the market when there are forced sales.
Did you experience the crash in 1991-93?
It was much worse than now, and it's what people are fearing.

[sscrabble] 02/11/2007 15:47

jonwig

even if prices fell 10%, any of these companies would still be trading at way below their nav - in theory if they could keep buying back their own shares themselves and the nav per share would increase - you can not do that with a bank that might have a market valuation of 10 billion but assets of one billion = the value of the bank, as nrk , can fall to 10% of its peak and there assets are nearly valueless if they were to go bust, but if say SGRO shares fell to £2 - they could sell up and get £6 or £7 a share !!-- if there is a masssive FTSE fall to say 5000 the bank and other shares would plunge, but it seems to me these real estate shares just cannot fall much lower

[armitage_sink] 02/11/2007 14:39

i think we've bottomed out now...I hope so...I just purchased some on Monday at £4.59!

[jonwig] 02/11/2007 13:33

sscrabble - either they are very cheap, as you say, or will go lower yet.

Don't forget that the NAVs reported are historic. Already there are projections of over 10% being shaved off asset values, and it could be worse than that, or not!!

Look at bank shares ... there's so much uncertainty about that they are all being hammered today.
At some point there will be a bottom, but calling it right will be pure luck.

If you want to buy SGRO, why not divide your money into three parts and use just one now?
(No advice intended.)

[sscrabble] 02/11/2007 13:18

no one interested in these companies? - cannot understand it with nav/share price ratios like this surely, long term, its like buying pound notes for 15 bob?

16-Jul 01-Nov % share price NAV(p) NAV date disc % disc % now

BXTN 416 356 86% 534 31-Dec-06 22% 33%

SGRO 599 453 76% 718 31-Dec-06 17% 37%

BLND 1367 1053 77% 1682 31-Mar-07 19% 37%

LAND 1749 1607 92% 2304 31-Mar-07 24% 30%

HMSO 1362 1085 80% 1500 31-Dec-06 9% 28%

[sscrabble] 02/11/2007 00:21

re post 8

what looks the best value now , and surely they will have to bottom out soon?

16-Jul 01-Nov % sp NAV (p) NAV date disc % disc % now

BXTN 416.25 356 86% 534 31-Dec-06 22% 33%

SGRO 599 453 76% 718 31-Dec-06 17% 37%

BLND 1367 1053 77% 1682 31-Mar-07 19% 37%

LAND 1749 1607 92% 2304 31-Mar-07 24% 30%

HMSO 1362 1085 80% 1500 31-Dec-06 9% 28%

[deanforester] 24/9/2007 17:32

It's all part of the sub-prime lending, property market and dodgy loans scenario.

All commercial property shares are down, and the builders are having a bad hair day.

[s50cam] 21/9/2007 10:17

Whats happening, just went into auction but I cant find any news ?

[deanforester] 04/9/2007 17:29

I've bought some today. I have a feeling that property shares may never be as cheap again, but who knows?

[l.parker] 22/8/2007 12:41

Is this the turnaround ? As the driver at Segro says "bricks & mortar"
plus wise property buying.

[richardbroughton] 25/7/2007 21:34

Am I right to think this is trading at 20% less than NAV which includes the US business sold at 26% premium to book value and accounts for nearly 50% of the total NAV?

[l.parker] 20/7/2007 16:43

jonwig,
Once again,thank you for your comments. Segro are buying Industrial Estates
all around Heathrow,that must be a sign that they think the future will be bright.

[jonwig] 20/7/2007 16:11

Hi, LP.

I doubt the name change has much to do with it - I hold BXTN, the nearest company to SEGRO (ie. UK industrial property) which SEGRO has outperformed this year.

It's interesting that company comments (Chair and CEO) are always positive even now (unsurprising really), whilst in 1990-91 (a real bomber!) companies were also very bearish.

So I don't think there will be a massive bust here, but shareprices are unlikely to do well in the face of rising interest rates and a jittery overall market.

I've a thread here, which charts the 10-year gilt index (a key indicator I think) and collects articles on the main players:

[l.parker] 20/7/2007 12:54

Your contribution is a most welcome observation, I hold segro,& have done for a couple years. Do you think the change of name has anything to do with drop in value? I also think the large sell off by many directors some weeks ago ,they
must have known that down trend was in the offing. I'm sure they will return to
their true value,but how long could it be,I wonder! Never the less I am increasing my holdings, keeping my fingers crossed.

[jonwig] 16/7/2007 17:50

You're welcome, P.

REIT? sp (p) NAV (p) date of NAV disc %
BXTN 1 416.25 534 31 Dec 06 22.1
SGRO 1 599 718 31 Dec 06 16.6
BLND 1 1367 1682 31 Mar 07 18.7
LAND 1 1749 2304 31 Mar 07 24.1
HMSO 1 1362 1500 31 Dec 06 9.2

Some background here:

[praipus] 16/7/2007 17:04

Thanks jonwig, 20% discount interesting. Kind of quality will out situation I imagine.

[jonwig] 16/7/2007 16:30

The whole property sector is spooked by redemptions from some open-ended funds such as New Star, etc.
It's mostly retail investors, and these funds are selling property shares to meet them rather than their bricks and mortar.

With SGRO and BXTN (which I hold) at around 20% discount to NAV, the shares are cheap, but it's not clear how much cheaper they'll get - especially if we get another hike in interest rates.

The CEOs and Chairmen of the biggest companies (LAND, BLND, HMSO, etc.) are still pretty confident on the outlook for prime UK commercial property.

[praipus] 16/7/2007 16:20

Any reason why the share price is retracing? News flow seems good.