Ben Bailey PLC (Housebuilder).
The Mail today said to buy Bellway as they looked very cheap. BBC is cheaper still and is constantly overlooked by analysts.
I am lucky enough to have been in this one for years, and as 2005 started, it hit 500pps. After interims that said it was affected by the slowdown in the market, and the general malaise in the housing market, it has plummeted by 30%. But is this overdone?
The basics make it look very cheap. Trading on a P/e ratio of 3.508 as compared to Bellways ratio of 6.279 it has a similar dividend yield (3.198%). Having read the investors reports it appears the market did overreact, as hidden behind the headline of being affected by the market slowdown was an increasingly large landbank and a move away from their traditional stock of 3 and 4 bed detatched homes and into semis and townhouses, to increase the margin on the land they own.
Further to this, they are specialists in brownfield development, which the government is known to favour and operate solely in the north of England, where the housing market has been less affected than elsewhere.
January sees the year end results posted, and with all the above taken into account, as well as the predicted housing crash not happening, I see a return to the higher sp levels of late 2004 / early 2005. Add into this a 15pps dividend and I see a winner, both short and long term.
Thoughts anyone?
Alan

About 60 years in a building society account, Baza ;-)
Alan