Watkin Jones Share Discussion Threads

[walterwhite1] 14/10/2022 18:35

Delayed publications make interesting reading this evening.

Particularly the 1 million share trade costing £820k
Selling pressure coming to an end??

[hybrasil] 14/10/2022 17:16

74tom
Building is never going to stop. And my posting history will show you I am very rarely bearish. (Ok I was on Argo blockchain)
I have a large holding in van Elle for example. I have holdings in several property companies
I just feel that there is an awful lot of nervousness round what Watkins Jones are doing as do the holders of several millions of shares who have sold in the last few days. Look at the trading volumes compared to average. They have sold at a 20% discount to the 2016 float if they were lucky enough only to have paid £1
The family have got out put in professional managment (and I believe that spec building
is spectacularily unsuitable for professional managers)
I’m not going to post now for a month or two
And bond yields have gone up again today

[sphere25] 14/10/2022 16:08

Thanks 74tom.

Unfortunately, it still isn't enough. In days gone by it would have been enough, but clearly we've had the smooth and now we have to face the rough. I guess the challenge will spur us on, even though the expectation is to rack up a fair few small losses along the way!

They have exhausted the big buyers at 82p and filled the offer there now so it looks abit grim. Someone is clearly sat at 82p-83p with millions to sell.

If some whoppers follow, it could break higher on those, but as per the activity at RCH today, it is hard to say how much buying it is going to take to even get a bounce at times!

Clearly not under any illusions about how bad it is is out there and how bad it might get so no excitable moves or expectations as yet.

We shall persevere, endure and come out the other side!

Onwards!

All imo
DYOR

[pre] 14/10/2022 15:49

Markets are fickle and looks like ftse has given up its earlier gains, confidence lacking in govt too many u turns which don’t help sentiment as it damages credibility imv

[74tom] 14/10/2022 14:10

Nice post Sphere, I've just added some more too post KK getting the boot. Gilts are already on the way down and I expect they'll stabilise post tax cuts being reversed. Stability is a scenario that will benefit almost everyone, except those wanting to short everything and anything ;)

I thought it worth responding to Hybrasil's earlier bearish post as I think it highlights that they still don't understand the WJG business model...

"I keep coming back to the model here. The suppliers of finance on which it is predicated simply will not (if I am right) be here"

Why would any patient capital investor decide to stop investing in the long term BTR / student property market because interest rates have normalised? For a start there was a shed load of student accommodation build pre the 2008 GFC when base rates were substantially higher than present...

If they borrow £200m to fund a development and have to pay 3% more interest then this will to be recouped over the life of the asset via higher rents. Likewise on a student property development. They are buying the asset for it's reliable and price inelastic rental income, not for the paper based gain in underlying NAV...

Their is a very obvious bear case against all UK housebuilders & property REITS of both falling demand for new builds & falling NAV. WJG aren't in the new build for sale market and they aren't a REIT...

[pre] 14/10/2022 13:57

Chancellor gone, should see a change of sentiment as a reshuffle looks likely and some of those mini budget proposals may be altered to balance the books. How quickly things change and ftse 100 is up with support for sterling.

[sphere25] 14/10/2022 12:19

Nibbled a few more here.

Those research reports keep coming in a bid to try and get the price to correct some of the move down. This is hard work to get even a bounce of 5-10%. There are buyers in size sat at 80p, but despite above average buying volume coming in for three consecutive days, there has continued to be stubborn sellers in size at 82p and 83p.

It looks like bulls are trying to take control of that 82p mark now: 25k bid at 81.5p, 48k at 81.8p, 10k sat at 82p (joined by a 50k at 12:31) and 10k sat at 82.5p. This looks a tad more interesting as the automated sellers would usually just hammer the price back from 82p, but the price really needs to get through this 83p-85p range now.

12:25 EDIT: This 5210 iceberg at 83p was causing a blockade - alot of trades just gone through, which might have cleared it. Keeps coming on at different price points though.

A close above 85p should signal a more bullish move higher.

This market doesn't give much even on the bounces but the bulls are having a little go here.

Moved my stop to under 79p from 76p now.

12:39 EDIT: 150k lobbed at 83p without the price moving. This is what WJG needs, bigger sells being mopped up for a bounce - need that volume increasing or it won't do anything.

All imo
DYOR

[2vdm] 14/10/2022 11:52

Here's the link to progressive equity's research which supports WJG's model over the longer term. I think it makes a good argument for the LTHs of which I'm one.

hxxps://progressive-research.com/wp-content/uploads/data-sync/research/WJG%2020221013.pdf?utm_source=sendgrid.com&utm_medium=email&utm_campaign=website

[pre] 14/10/2022 11:41

Check out the research note

[skinny] 14/10/2022 11:38

Mark Watkin Jones left for personal reasons.

The 2018 RNS.

https://www.dailypost.co.uk/business/business-news/mark-watkin-jones-left-development-17015337

[srpactive] 14/10/2022 11:18

Unfortunately I feel we could be testing the 70p's again,
there does not seem to be a bounce.

dyor

[srpactive] 14/10/2022 07:46

Yes it was Wrexham and before that they were house builders.

Could be in for the new stand at the Wrexham racecourse
with the new owners perhaps.

We shall see.

dyor

[hybrasil] 14/10/2022 06:40

M-Kerr
Demand for my student accommodation exceeds supply by we think a factor of 3!

No issue there

I keep coming back to the model here. The suppliers of finance on which it is predicated simply will not (if I am right) be here

Their first student housing was in 1999. Interest rates since then have been historically low. I think that period is over

[m_kerr] 13/10/2022 20:43

maybe the obvious explanation is the correct one, and the WJ family decided it was a good idea to bank a 50-100% capital gain on the float price and diversify the family wealth. if they predicted a slowdown in the property market due to rapidly rising interest rates and an inflation spike, then they saw something in 2017 and early 2021 that 99.9% of central bankers, various experts and business executives didn't see coming.

the demand for PBSA is still there. whilst we chatter away on these boards about interest rates, there are frenzied bidding wars for student property. every year students have to start looking earlier to secure somewhere for next year. and generally people don't put off going to university because the property market is entering a downturn. if anything, it's just got a hell of alot cheaper for the 20% of students who are international.

and international students significantly over-index in PBSA -from the IPO document 'Private PBSA penetration is higher among students from outside the UK. In 2013/14 approximately 11 per cent. of overseas students resided in private PBSA developments, compared to approximately 5 per cent. of UK students. The Directors believe that private PBSA naturally attracts overseas students due to the quality, security and convenience of PBSA developments, which is a particular attraction to those without knowledge of the local property market. '

battered real estate prices reduces the price they need to pay to secure assets. what price would you pay nowadays for an old debenhams shop or an obsolete office to repurpose into PBSA? with no buying competition, possibly a price making development feasible.

[avenue_of_revenue] 13/10/2022 18:37

Huge daily trades always appearing at the close since Tuesday. Price holding well around 77p-85p. Set for a bounce which has not yet materialised probably due to the big trades whether loading up or offloading. Bought in at 80p looking for £1 over the next few weeks.

[bothdavis] 13/10/2022 17:26

Sentiment about what?

Recessions are inevitable, this one in particular after COVID, war in Ukraine, we also have Brexit still to deal with.....

Batten down the hatches keep calm, keep taking the dividends....it will be fine!

[srpactive] 13/10/2022 15:54

Lets hope the US reversal holds, if it does wjg
might re-test the ipo price for starters.

dyor

[hybrasil] 13/10/2022 14:35

Both
The reversal of the mini budget won’t fix this. Sentiment is dreadful

[bothdavis] 13/10/2022 14:25

Maybe the Watkin Jones had a wedding coming up, a retirement plan, maybe they didn't want to watch someone else run the business?

There are a myriad of reasons we could come up with, its their money they will do what they want.

If, as seems possible, the mini-budget is reversed, you could see a very quick rebound in many stocks.....................

[srpactive] 13/10/2022 14:14

h

Good post.

[hybrasil] 13/10/2022 14:03

Srpactive

If I am right (and I fully accept I may not be) in 18 months there may be no dividend.

Why do you think the Watkins Jones got out?
I was wrong in my last post on this issue they have taken more £120million off this table

Obviously they thought their money would be safer elsewhere.

I have been involved in and advising these types of business for over 40 years. Tthere is serious risk involved.

I still haven’t opened a short as I need to open a cfd account to do so

[srpactive] 13/10/2022 11:26

Interesting yield here now, have been watching for years,
but just decided to enter.
PE 5 yield 9.7%, interesting although with much risk.

We shall see.

dyor

[skinny] 13/10/2022 11:08

https://uk.advfn.com/stock-market/london/watkin-jones-WJG/share-news/Watkin-Jones-plc-Progressive-publishes-new-researc/89286143

[cordwainer] 13/10/2022 11:05

My last exit from here was at around £2.65 on 30/12/2021
Back in hoping that its oversold
Haven't seen the latest Progressive Report yet
I believe it will take some time for the business to recover margins, albeit a robust business model focused on relatively healthy looking sub-sectors. I do not expect dividend growth in the short term despite strong cash position. Having said that I see this as more of an income play than a grower over the next 12 months at least.

[mbdx7em21] 13/10/2022 10:53

Valuation. Following the steep fall in the shares, the cash-rich group is
trading at a FY23E PER of 5.1x and dividend yield of 9.9%.