Just feel free to put down any share/shares you feel will do well in 2015 and future years.

/

/

/

.

/

/

/

/

/

I like this one DC, its usualy the boring ones that make the money and make you money.

This is a corker......The business is highly cash-generative. It leases warehouses rather than owning them outright, it does not have large upfront costs and most of its contracts involve being paid in the same month that it delivers services to customers.

Only thing is the general market putting me off buying it.

The UK economy is well underway to recovery, no doubt helped by stabilising and improving house prices. But this national picture of rising house prices in no way reflects the reality on the ground, or the fact that the superheated London property market is largely driving this statistic.

Some of the recent momentum can be attributed to measures announced by the Chancellor in the March Budget. A new 'Help to Buy' scheme was launched, aimed at further stimulating the housing market by making it easier for home-buyers to borrow money.

However, this scheme has been criticised by both the International Monetary Fund (IMF) and the government's very own Office for Budget Responsibility (OBR) for potentially inflating house prices.

Many economic commentators believe we are undergoing a phoney recovery.

Even Nationwide concedes that “real earnings growth remains sluggish”.

What we have today is strong house prices without earnings growth.

This is a clear indication that the UK property market is being propped up by government policies that ultimately just leaves people saddled with more debt. That’s the thing about distorting the market, history teaches us that it ends in tears.

Evidence supporting this comes from many quarters, but in particular the retail sector, and the major grocers.

Tesco, Morrisons and other retailers are losing money and market share hand over fist to discount chains Aldi and Lidl.

Arguably if we were seeing evidence of the current recovery in every corner of the UK, the major grocery retailers would not have seen such a downturn in sales as households opt for cheaper products and lower bills.

Households are about to get squeezed even more. Rate rises are coming… and soon.

Interest rates have been frozen at 300 year lows for around 5 years now. But there is a growing expectation that the Bank of England will start to increase rates later this year.

The Governor, Mark Carney, recently warned that rates could rise sooner than markets were expecting. And even the Bank of England’s biggest dove, David Miles, says he’s likely to vote for a rate rise in the months ahead as the time comes to ‘normalise policy’.

People quickly forget what normal means. By the mid -1990s up until the recent financial crisis, the UK base rate had settled at around 5% and stayed in a nice little range for a decade and a half. That’s 10 times the level of today’s base rate!

Another way to assess what a normal rate means is to consider the inflation rate. When you look back historically, the base rate has typically hovered around 3-4% above the inflation rate.

So at today’s inflation rate of 1.5%, a normalised base rate would be around 5-6%.

This era of ‘cheap money’ and ‘government giveaways’ has been great for the UK housebuilders. Schemes such as Help to Buy have literally provided rocket fuel for shares in the big listed housebuilders and property companies.

As you can imagine, there’s been something of a land rush as housebuilders seek to ramp up volumes while the going is this good. But anyone that knows a thing or two about the property market will tell you it’s a highly cyclical business. The time to worry is when people stop worrying.

I spoke to a top executive recently at a large privately-held housebuilder. He was shaking his head at what’s going on in the market right now. “The big boys never learn” he told me. “We’re pulling out of projects because the numbers don’t make sense. But those guys just think short-term. They’re now switching to volume targets [rather than profitability targets]. It’s going to end badly again”.

Certainly when you look at the results being reported in the sector, the listed housebuilders look in great shape. But don’t be fooled. We’ve been here before, not so long ago, and when things unravel, they unravel quickly.

We look at three stocks we believe are vulnerable to a correction.

Barratt Developments (BDEV)

In a Q3 trading update on May 8th, Barratts said that increased buyer confidence and “the availability of attractive mortgage finance continue to support strong consumer demand for our homes.”

Barratt also noted that the Help to Buy equity scheme “remains a very attractive opportunity for our customers and, in particular, is supporting first time buyers."

For the reporting period, Barratt said that 2,150 of its new home reservations used the scheme, with a total of 14,250 units expected to complete in 2014.

Barratts have secured “excellent land opportunities across all regions”. This commitment to buy-and-build ties up loads of capital, which is fine and good so long as the housing market continues to grow at the current rate.

The percentage of new home reservations using ‘Help to Buy’ vs. total completions expected for the year currently stands at 15% and will rise substantially. Any housing market correction will severely impact on these numbers, and prompt a significant
downward readjustment in forward sales estimates.

Bellway (BWY)

On June 5th, housebuilder Bellway published an interim trading statement, and said it has spent £400m on land and land creditors since August 1st, up from £270m for the same period in 2013.

The housebuilder also recorded an average of 177 reservations per week since February 1st (2013 - 160), up11%, while ‘Help to Buy’ had resulted in 879 reservations for the same period.

CEO Ted Ayres said the company remained “well placed to deliver further enhancement to shareholder value.”

Although Bellway made a point of highlighting the improving strength in its balance sheet, the housebuilder recorded 3717 reservations over the period, of which 879 were ‘Help to Buy’ reservations. This means that the government-sponsored scheme has
resulted in a 23% hike in reservations for the period.

Once again, any housing market correction will leave a big hole in Bellway’s forward sales estimates, and at the very least send the shares back to where they started the year.

Redrow (RDW)

On April 29th, Redrow published an interim statement covering trading for the 17 weeks from 1 January to 25 April 2014. Redrow said that net reservations for the period were up 17% at 1,280, and that the average selling price of private reservations for the financial year to date had risen 16% to £289,000, mainly due to an increasing proportion of sales in London and the South East.

Legal completions in London are progressing well, and Redrow expects this division to contribute c.£120m of turnover in the current financial year.

The housebuilder added that the Government's announcement of the extension of the Help to Buy scheme “provides a stable platform to increase our investment in new sites and grow our output.”

Due to the timing of investment in land, Redrow’s net debt at 25 April 2014 was £153m, (£149m Dec 2013). Net debt is expected to be c.£200m at the end of June 2014.

As with Barratt and Bellway, Redrow is confident of a strong outcome for the full year. But with the smallest market cap and turnover of the three (£604.8m for year to June 2013), at £200m Redrow’s debt levels are alarmingly high, leaving the group seriously
exposed to any correction. So much so in fact that a worse case scenario could
even see the company go cap in hand to shareholders.

Exec,

Interesting Economic evaluation and question marks over builders!

Many have been thinking similar.

Thats the Galvan report.

Yes. It came in via a link from a Galvan marketing e-mail.

Actualy they are pretty good.

They gave some excelent tips at christmas.

One of the better tipsters imo.

They are primarily Advisory Brokers using CFDs and so trade in both directions on the markets.

Can anyone on here put in a good word for their client handling?

Do they 'churn'?

Or do they usually make their clients some good money?

As an example amount, £10k in the bank earns you less than 3% gross these days and there is nothing of interest to be experienced in the doing of it - but it's safe (and boring).

I understand Galvan's client money is kept separate and is also covered by the FCA. There are obviously no guarantees but would an example amount of £10k with Galvan be a much better option?

I think they would be better at spotting trades than I would - but they charge you for it.

Opinions please.

Exec - I placed 10k with them in 2007, they managed to lose 1k of that in double quick time and I got out sharpish. You are charged win or lose on any trade placed. So win, win for them. It was all part of the learning curve for me so I put it down to experience.

Personally I would not go anywhere near any of these companies now.

I know I slate him on football thread and the Talk thread but if you persevere with the literature on gf's thread (Chart Attack) you will get better results in time. Galvan may well have improved since 2007 and I was just unlucky. Just my opinion. DYOR

/

More on the house builders...

From: http://www.dailymail.co.uk/news/article-2716539/Booming-property-market-triggers-boom-biggest-surge-housebuilding-decade.html

Booming property market triggers biggest surge in housebuilding for more than a decade
Aug. 5, 2014

Construction activity has grown for the last 15 months and firms are now hiring staff at the fastest level since an industry survey began in April 1997.

However, the Chartered Institute of Purchasing & Supply warned that growth could be curtailed in the coming months by suppliers struggling to keep pace and the 'sharpest deterioration in the quality of subcontracted work since 1999.


Construction activity has grown for the last 15 months, recording figures above 50 (or no change) in the Markit/CIPS survey

The home building market grew at its steepest level since November 2003, driven by strong demand for new housing projects, according to July data from the Markit/CIPS UK Construction PMI report.

Overall, the index edged down to 62.4, down from 62.6 in June, but activity remained well above the 50 level that divides growth from contraction and was above City expectations of 62.

Tim Moore, senior economist at Markit, said: 'July's figures suggest the UK construction sector is enjoying its strongest cyclical upswing since the global financial crisis, while a new record rise in employment highlights that construction firms are increasingly confident about the sustainability of the upturn.'

The report showed that civil engineering activity lifted sharply in July, while commercial construction also rose but at a slower rate than in June.

David Noble, chief executive of the CIPS, said: 'The house building sector is racing ahead this quarter with the fastest growth in construction of homes for over a decade.

'The industry as a whole continued its impressive growth, dipping slightly from last month's high.'

But he added: 'One concern however, is the strain on supply chains that could become a roadblock to sustained growth in the future.

'Construction firms reported the sharpest deterioration in the quality of subcontracted work since 1999, which combined with lengthening supplier delivery times could conspire to put the brakes on the sector's growth.

'But there's evidence that firms are starting to look beyond in demand sub-contractors and instead further boost their own staffing levels, which goes some way to explaining the record rise in employment levels.'


Housing minister Brandon Lewis said the construction industry was 'bouncing back' and hiring at record levels

Housing minister Brandon Lewis said: 'The last administration's housing crash led to the loss of a quarter of a million construction jobs - so I'm pleased to see from these figures that the industry is bouncing back, with hiring at record levels.'

Mr Lewis added that, due to the government's Help to Buy scheme, almost 40,000 households have now become homeowners, which has helped building increase to its highest level since 2007.

He added that since Help to Buy was introduced last September, it has led to a 34 per cent increase in private housebuilding during the first year of the scheme.

Well I personaly think the bubble is about to burst on housing.

Lloyds are just the big first pulling the plug on the market.