Help me - I bought these a month ago - when they were being tipped all over the place. Since then the sector has gone down the swannie - should cut my losses (13%) or hold on for the long haul?

Interim Scrip Dividend Issue

Hold on, wimp! If you can't take the drops don't enter the race. Actually, Persimmon is one of the best managed in the sector, I personally hold the shares and will keep holding, depends on your outlook, how much you need the money, why did you buy them (quick gain, long term or div) and if you operate on a stop loss (you should but we all don't do what we should do) Always remember you are gambling to some extent or another, if you cannot afford the losses you're in the wrong game.

np. You could be in for further losses before any relief. The house price data is on the slide and is unlikeley to improve anytime soon. IHMO you invested in the right company at the wrong time. So If your investment horizon is years and you can mentally accept significant falls in the short term before recovery PSN is probably an OK stock.

Smile

Wow, until a couple of months ago, I used trade this one actively as its an old favourite of mine, but thought it would level off about 7 until early december before continuing up. But its now about 6 instead. The company is solid. As Minx & Smile mention, the sector is not having a good time at the moment- hence the drop in price. This share can be very volatile, and can swing heavily down as well as up, which I why I always like it (as well as the nice divi!)

An interesting 2 year chart! This share usually is at its lowest in Late Nov, early Dec, but its close to a support level of about 570. I may be talking crap, as charting is not my thing, but if it drops below 570 it is likely to continue, until the 450 level. So personally I would put a stop loss in at 570 with a limit buy at 450. I must admit I certainly will be buying large chunks of this share if goes anywhere near 450 :-)!

Forgot to mention, of course it could bounce off 570 and head north, which also is possible!

the problem with housebuilders as I see it is that they have risen on the back of increased eps over the past few years but the ratings (P/E) have not changed. If earnings start to level off or even drop and the rating remains the same there is very little upside to be had, though as lw says there is quite a bit of volatility if you can pick the peaks and troughs. Sadly I sold my BDEVs too early last year and missed quite a bit of profit. The shares are now back to where I sold them, but I'm a bit worried we are in a downtrend now that TWOD have issued a warning, so have held off buying them back for now. If I had held PSN, I would probably have been stopped out after a 13% drop in any case. The only thng that might save you is corporate action a la BKL or a takeover, but as with asking directions in Ireland, "I wouldn't start from here...." etc etc.

PSN down over 1% today on an acquision announcement (just looks like the usual little pull back to me).

First class management, cracking chart.

Looking at these as a possible recovery play....anyone who knows this share think I'm bonkers?

np1009440 did you sell or did you stick it out?

Couldn't resist getting some of these.

you're a bit too last for these if you ask me!

Have a look at the PE and PTBV on WMPY instead. Far more attractive.

Anyone currently holding these? Looks to be a reasonable defensive stock.
Chart looks to be in a healthy 'Up' trend & sp has not seemed to suffer over the last few weeks of general market panic. FY figures seem to be on target & it looks as though interest rates won't go up any more in the immediate future.

Harrycat, hi there - oh dear!
Since Aug07 sp has halved, yet yield is only shown as 3% - is this site's figure wrong ( they often are!), or is the yield still this bad?
/
Anyone buying now is getting the land-bank for free as PSN will continue to build homes ( not on flood plains, pse), and will make similar profits, albeit down a tad as house-prices appear to fall each month ((But is it only a small fall)).
/
I've been considering this stock, but with a further 5% fall today, why not wait and catch them below £5 & 4% yield?
Some folk are saying this downturn is "enough" - but we know from the past a real downturn, ( with power behind it, -the US housing fiasco which is yet to be fully-felt round the World) - er, takes a couple of years to work out.
If this started in the UK about August07 ( when you had posted, I guess), then we have at least another year. . . . say until Summer 2009 before we come to Market, feeling Good.
Sadly I don't think "now" is the time to be buying . . . . and your view?

A huge amount has changed since Aug last year, so I would say steer well clear for the moment. Until the down trend is broken for most of the house builders, I will only be watching rather than buying.

the question is , if money is going to be as tight as predicted who will buy these new houses?

Yes, plus the snowball effect of buyers unable to get credit & therefore the builders unable to shift the properties & therefore less cash to continue their building programme etc etc. Turnover will be down, profit margins will be down, divi will be down. The only appreciating asset will be their land bank. All imo.

Persimmon appears to have passed its low, for now - may I suggest another source of woe ( for Housing)?

Namely the Buy to Let market, which has been in negative profit for a couple of years as more and more folk bought properties "For their pension" ( Late '90's but also more recently from 2001 when stockmarket looked dangerous)- - - on the face of it you borrow cheaply, let the (new) property to cover the Mortgage and as the house appreciates over 20-years you take a fat profit and Retire. Many folk then re-mortgaged and now have a string of Rental properties - TV-shows making "renovation" look easy also added many 2up-2down Properties in areas where there is little work, now their Traditional Industries have gone overseas.

However, the reality is that there aren't enough Renters about, so Rental levels are NOT covering these Mortgages - never mind, -the House price (rise!) will see to that - Well it WON'T . . . . because amateur Landlords bought too much and now see a falling Market - so logically they will SELL - and until these "excess" properties are occupied there is no need for vast swathes of "New-Build" - - - so, it follows IMHO, there will be a period of slow-down and falling prices - both are BAD for Builders and associated industries.
This is not to say all house-prices will fall, just that those on new-build estates will drag others down since they will have to be cheap on account of being EMPTY and that is never good for a house, as it attracts damp and vandals.

( Harrycat:- Their land-bank is an asset, but it is also the reason for their Debt, and the debt has to be serviced - wheras the land can look after itself - having only "value" if you want it.)
What do you think?

If there aren't any new builds where are all the Polish plumbers and Romanian slave traders going to live?

Is this an immigration issue? - or are they renting one house and sub-dividing it to see how things go?
That might explain why they are eager to work, haing no domestic distractions ( for now).
Many in the building trade are employed in "Extensions and improvement" - ie Well-off folk with good jobs ( possibly excited by TV-shows), wna t their dream Kitchen, En-suite, extra space etc and don't wan to move ( because of schools, etc)....there have been stories of a handful of such workers banding together with a Brit, who is the money-man and who knows who to employ on planning etc. this troupe then improve an area as word gets round.
I'm not convinced that the UK can continue to allow immigration and even if we did they tend to be very few with Good Job prospects ( like Doctors) and very many who are keen enough but unlikely to afford a 3-bed semi starting at 200k.
These low-wage workers may occupy the 2u/2d renovated properties I mentioned ( esp. in our larger cities), but that will have little effect on the properties Persimmon builds - My guess is PSN will move up-market selling fewer Director-homes at higher prices with really good finishes, larger plots etc. - so leaving "housing estates" for a few years.
This will reduce Turnover and profits, since the land-bank (debt), that was an asset is not looking so clever in a falling/stagnating industry.......all IMHO.

EDIT: 24 April08 - PSN down 6% today - however, since its blip-high in late Jan 08 c.8, .....it is now c.6 - rather shows that this is an industry in decline IMHO.

335p today, down a little more as markets ann. falling house prices again.
This was nearly 8 in Jan08 - howzat!
As a long-term investment one of these Builders - and - one of these "Mortgage giving" Banks - - - - - will be a great investment over time

- Ah, but which one?

When RBS makes a fist of taking over another Bank ( at peak valuation!), you can be sure a punter like me knows nowt about finances. Er, except to keep my money IN a bank, rather than "on" it.
Today - received the Begging-Mail from HBos - will try to read what's in it for me later.....I suspect it's not good. I mean - what good was the money I HAVE invested in them ( just a handful of shares, probably from the demut days, if memory serves).