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

And another one reporting today. Crest Nicholson. Everything looking rosey, sp rising on results and a P/E ratio of 7.849.
In this season of housebuilders reporting, the message seems to be; "Hey guys, it aint as bad as we thought it might be".
Gives me great confidence that as focus turns towards BBC year end (31/12) this will rise in anticipation and again on publication.
Alan

Not a lot of volume on BBC, but I think the MMs will push it up to reflect what else is happening in the sector, which seems pretty rosy as Crest numbers indicate. Hopeful therefore for continuing rise in SP into the BBC year end and with some even modest activity it good jump nicely.

It also appears today that McCarthy & Stone have bought a load of their own shares. I know they aren't quite the type of housebuilder we are talking about here but it is another sign of the entire sector being undervalued. The trick, as always, is to find the most undervalued!! That is why I harp on about the P/E ratio and the divi yield of 15pps.
Alan

As I have written previously, I believe this share to be predictable over 12 months, and the last three years charts are almost a copy of each other in the timing of rises and falls and the angle the chart climbs and drops.
Between end Nov 2003 and Feb 2004 there was a rise of about 30%.
Between end Nov 2004 and Feb 2005 there was a rise of about 30%
I do hope that the predictability continues. That would target holders for a price of about 540pps.
Heres hoping it is as forecastable as it has been for the last few years.
Alan

Alan - thought KIE AGM comments might spur them ahead of BBC. Chairman's statement roughly translates as "things are going stonkingly well" and the shares drop a few pence. Funny old game, but I still expect both to do well over coming months.

Me too mate. Its the results season in this sector and the crash that discounted them all never happened!!
Good results on one player usually trancribe to an entire sector being moved up. Not to be today, but we will have a merry christmas and happy new year with BBC and KIE, I'm sure.
Alan

Alan - Looks like a few people read have the AGM statement for KIE a day late. Quietly confident - but BBC may still get ahead on their trading update due in a couple of weeks.

I love a good natured race!!
Alan

oop's sorry Al wrong thread.

You know you're always welcome, Driver.
My home is your home, my food is your food, my wife is y..., sorry, got a bit carried away and emotional there.
Alan

Al
I know Im not a very good tipster, but take a look at cct read the thread well some of it anyway, cct the seller of this years top must have toy (THE DALEK) small M/Cap 25m sp 52p recovering from a high of 160p all time high 450p

Got one on my Xmas list, driver. Giving it the once over as we speak (or read, or whatever).
Just noticed the headlines in Saturdays Express are along the lines of "Crash, what crash? The housing market is off again".
Didn't read it fully, but that is the kind of news this sector needs. It won't do it any harm, anyway!!
Alan

Here she goes again.
Bang on time to mirror last 2 years charts.
Alan

Good call, I read your other posts and after my own research concurred and bought in yesterday morning.

Thanks

My pleasure UKR. Hope we're both right then!!
Alan

Ticking up nicely and looks if it is about to run again. At some point these might be taken over by one of the bigger boys. All the buys so far look smallish and are probably retail investors, with no sign yet of the big boys getting in yet. I will continue to hold mine hoping for 450p early in the new year. IMO, just north of 500p looks the ultimate top, except we get some takeover activity. H

Hi H.
Right at the begining I expected the high 400's by feb,
Seen nothing to change my mind, but will probably cash in, in feb anyway, regardless of price, just expecting the same as previous years.
Alan

Alan, nice move today with good news from the update. High 400's by Feb looks conservative at the moment given the prospect of increased number of plots next year and consolidation in the sector. Pity it isn't going ex-div early in the new year to scoop that up also. H

Well, back from some very crappy hols and delighted with the pre close statement and the move north on it. This co do have a habit of conservative interims followed by very good finals, and this keeps reflecting in the way the sp moves through the year.
If the increased land bank is financed by profit, I stay in regardless. If the increase is financed by higher gearing, then I still think divi day is a good time to get out and buy back in at a lower price through the late summer, but I will take a final view when i see the finals.
A fiver would be nice, H, as it would make this a ten bagger for me and those are few and far between, even if it has taken a good few years since my original buy. I have never sold a single share in these, and it will take absolute certainty of a fall for me to sell, as the divi is so good (30% of my original stake), but if the finals are in our favour and the sector consolidation does continue, then there is still another 20-30% in these by spring. heres hoping!!
Alan

Up another 10p today, on low volumes. Buys outstripped sells and closed on a session high.
Gotta be happy with that. It bodes well for the next couple of days, (I hope).
Alan