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Taylor Wimpey Fundamentals (TW.)

Was hoping that momentum and volume trading would close the gap! Not to be.....yet.

It is interesting. Lately the pattern has been mostly price falls in the morning and then comes back in the afternoon. I take this as a buy the dips mentality which I see as excellent support for a move higher at some later stage

Agree CC, very similar to how the MGGT chart looked from the lows. Gaps always seem to be filled eventually.

House Prices

The average asking price for a house in the UK slipped 1.2% on month in August, property tracking
website Rightmove said on Monday - coming in at GBP304,222. That follows the 0.9% decline in July.

On a yearly basis, house prices advanced 4.1%, slowing from 4.5% in the previous month.
"Many prospective buyers take a summer break from home-hunting, and those who come to market at
this quieter time of year tend to price more aggressively," Rightmove Director Miles Shipside said.

Is it time to buy the housebuilders’ shares? - By Motley Fool | Mon, 22nd August 2016 - 13:47

Shares of UK-focused housebuilders such as Persimmon (LSE:PSN), Taylor Wimpey (LSE:TW) and Bovis Homes Group (LSE:BVS) continue their recovery today after falling earlier in the year.

Is this a bounce you should hop aboard or is more caution warranted?

Declining earnings

I'm cautious on the housebuilders and won't be rushing to buy their shares.

Looking back to the aftermath of the financial crisis, the housebuilders have travelled a long way in terms of rebuilding and growing their profits and in the way their share prices recovered from the depths that saw them trade with penny share status.

However, the halcyon days of double-digit growth in earnings year after year appear to be over -- at least for this wider economic cycle. City analysts following these three firms predict declines in earnings per share for 2017, Persimmon's to fall by 9%, Taylor Wimpey's by 6%, and Bovis Homes' by 6%.

The big advances as earnings recovered look done and forward growth seems set to become much harder for the housebuilders to achieve. Perhaps we're already seeing peak earnings for the sector in this wider macroeconomic cycle, despite a favourable interest rate environment and an ongoing need for further housing in Britain.

Downside risk

Affordability will likely act as a brake on demand at some point. House prices won't go up forever and people can't buy houses if they can't afford them, even if they need somewhere to live. Perhaps the ramifications of the process of Britain leaving the European Union will upset the balance of variables that has hitherto kept property prices rising. If it does, and property prices start to ease in a significant way, I can't see such a situation doing the housebuilding firms' profits and share prices any good whatsoever.

I think it's dangerous to flirt with out-and-out cyclical businesses after a long period of robust profits. When profits and share prices are elevated, as now, the risk to the downside for investors is at its most acute and the upside potential at its most limited. The stock market as a whole isn't as stupid as we might sometimes think. The market figured out cyclicality long ago and tries to mark down the valuations of cyclical firms as their profits rise in anticipation of the next cyclical down-leg.

Such valuation-compression will likely drag on investor total returns from here, so is it really worth flirting with the unknown location of the next cyclical plunge that could take away years of dividend gains in capital losses? I don't think so, especially when there are so many other less cyclical investment opportunities available on the London stock market paying more reliable dividends than the housebuilding companies right now.

The time to invest in uber-cyclical housebuilding firms is when their profits have vanished and their share prices are under the floorboards, such as in the immediate aftermath of the financial crisis. Right now, their businesses look far too healthy, so I'm avoiding them.

I'm staying long and waiting for the share price to get back in the 170 to 205 channel.

I think the dividend yield supports the price regardless of the economic and political dynamics.

Taylor Wimpey is steadily going down again. Now 140p.

Good stock to trade ,been in and out the last few weeks .

The rot has not even set in yet on Construction sector. Property prices are totally out of kilter with economic reality. Margins will be squeezed.

Your right there Claret ,,
(Property prices are totally out of kilter with economic reality),

however we are short of housing , the problem could be that it's becoming too expensive and at some point sales will slow.

despite your gloom, residential interest has perked up noticeably within the last month or so
my contacts in kent tell me houses at the lower end - ie say £230/250k - are being snapped up and elsewhere, properties at £1m+ are also getting interest

obviously location is everything (a true truism!) but a weak £ will also excite overseas investors

I have nowt against any of House builders per se. They have had decent hand thrown their way with open borders. IR screwed to the floor. Plus Govt help to buy. Knowing when to take profits is always the difficult one. We all know that who take aim on this site.

i have no trading positions in this sector, and long(er) term criteria are very different

Been a great trading stock over the last month or so.....

true jimmy...all that is to be done is buy on the dips and sell on the highs :-/

That's what i have been doing optomistic , just have not been greedy .

Taylor Wimpey, up 2.6%, Barratt Developments, up 2.6%, Persimmon, up 2.1%. Housebuilders were higher as the UK Department for Communities & Local Government said councils in England will be offered up to GBP18.0 million in new funding to speed up the construction of up to 8,000 homes on large developments.

The 'capacity fund' is designed to tackle planning issues that can hold up projects. "We want to turbo-charge house building on large sites to get the homes built in the places people want to live, so that this country works for everyone, not just the privileged few," Housing Minister Gavin Barwell said.

Good of the housing minister to make such a statement, perhaps he ought to have added...if it is within their means.

Taylor Wimpey confirms strong H2 trading

StockMarketWire.com

Taylor Wimpey said H2 trading into the autumn selling season has been strong, with good levels of customer confidence and demand underpinned by a wide range of mortgage products.

"While there remains some uncertainty following the UK's vote to leave the European Union, we are encouraged to see that the housing market has remained robust and trading has remained resilient," said CEO Pete Redfern.

"We have a strong order book position for 2016 and going into 2017, and we will maintain our focus on delivering our medium term targets.

"Looking ahead, we continue to implement our disciplined strategy which ensures that we are well placed to perform well through all market conditions and deliver enhanced value through the cycle."

OUTLOOK

Whilst the implications following the EU Referendum are still unclear, the UK housing market has remained resilient, with long term fundamentals underpinned by strong demand, the company said.

"Looking ahead, we remain confident that our business model and strategy focused on managing the business through the cycle positions us to perform well through all market conditions.

"We continue to focus on delivering our enhanced medium term financial and quality objectives, embedding our customer service processes and driving improvement in operational discipline.

"We expect to deliver an improvement in operating profit margin in 2016 (FY 2015: 20.3%), as previously guided, and a return on net operating assets** of around 30%. We remain committed to the announced £450 million total dividend payment to shareholders in 2017."

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