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Morning RM, Strictly & anyone else who’s in here
I just wandered if anyone has a view on these two points…
I decided to take the plunge here yesterday lunchtime as I saw best value at the time and with the inflation data coming in better than expected over the pond it might transfer over here too with the possibility of a leg up. Also there’s the imminent update tomorrow. My two questions are…
1: With the RDW update stating they have been effected with the lower chain collapses and RDW having the highest ASP and CRST the second highest. Do you think that could read across here?
& 2: To me it looked like the SP was being held down yesterday am but then took off like a train. In fact, since yesterday when said data came out the US (1:30pm) the second best performing HB has risen by 6.8% whereas CRST are up 12.4%. Has the update been leaked by any chance?
ATB for tomorrow btw
Morning Crossley,
Crest had a dry spell on the last trading update, with a SPOW of just 0.25 and the market threw the baby out with the bath water.
There can be no doubt crest is still the best priced housebuilder, even after the rise, it’s still trading at c.45% discount on its net tangible asset value. Absolutely crazy.
The update could well have been leaked. What’s particularly interesting is it that it looks pretty clear to me the last update was leaked. It fell sharply from 226 to about 190 in the run up to the update, and then fell a further ~10% to around 170 on the day of the update.
Any company can have a dry period for sales, particularly with the economic headwinds it’s had, but times are changing with inflation now at 4.6%, mortgages will reduce, sales will pick up.
Always remember the strength and security is in the balance sheet here.
Hi again RM
It fell sharply from 226 to about 190 in the run up to the update
I didn’t know this so thanks for that. It’ll be interesting to see what happens over the coming few hours. It looks like others are starting to pull back a little…. for now?
I will admit, I am a little nervous about tomorrow’s update. Looking at the website, they seem to be giving a lot of incentives on properties (around £25k) in an attempt to get them sold.
The market is so fickle at the moment so there could be some pain tomorrow, but I’m in for the long term.
fickle! i used only that word yesterday rm.
a little nervous, if i were in your shoes rm i’d be absolutely ****ting myself. all sorts would be going through my mind.
although, if you’ve a strategy and you believe in it then you have to follow it? i’m on a 15 year plan of steady, average 20% gains. it was 16.6 last year but i’ve a little catching up to do and 20 would knock a year off. if i live long enough that is. i’ll be sparing a thought for you at 6:59am on the morrow mate
Thanks Crossley. Do I take it you’ve sold the holding you bought yesterday then? I’m in profit as it stands so shouldn’t go underwater if the TU isn’t favourable.
No. I’m holding. I’m just under 10% up so it gives a bit for tomorrow. I spread my holdings about quite a bit and in different sectors. So my investment here is much smaller than yours. My general rule of attack is to buy stocks that have dropped to much and look for a rebound. I’ve missed quite a few this year from fear. That’s my learning to take into next. If I’d have done what I thought I’d be returning around 50% YTD
I am probably in too heavy here, although it has played out very nicely thus far. I may sell half my holding later today and buy back in the morning just to make sure I can get some sleep tonight.
Bottled it around 3pm at 192.9!
Good luck with whatever you do
The trading update could’ve been worse, but could’ve been better.
I sold half my holding yesterday afternoon, and am just keeping the powder dry for now.
I see long term gain here, but I think it’s inevitable this will drift back down to 170 in the short term. Nothings really changed since it was 170 only 2 days ago. The fall in inflation was expected anyway.
Afternoon RM
I’m glad for you you did.
What’s your thoughts on….
With the net cash dropping from £277m to 65m and pre tax of say 45m (17.5p per share) they will surely have to drop or maybe even suspend the div come January? It looks like they’ll burn through net cash soon at this rate?
Afternoon crossley,
I had a stop loss set at 185 for my remaining holding, so I’m out completely now. Don’t get my wrong, I still like the company, but it’s drifting back to 170, I don’t think it will revisit the 150’s, but who knows in this market? Anyway, there’s no point being in a falling knife.
I think you’re right, there’s not going to be enough cash in the pot to pay a divi. Springfield recently got in a similar situation and had to scrap the divi, and the share price went well below 0.5x book (I think about 0.35x?).
As I’ve said Crest isn’t really my thing but I’ve looked a bit further into this as I’ve not had a busy day.
With this statement only being twelve weeks ago I’d certainly like to see some financials in Jan before investing?
The firm’s group finance director Duncan Cooper told analysts yesterday (21/8) that Crest would likely end the year with less than £100m in net cash after the firm reported that sales had dried up in recent weeks in the face of soaring interest rates.
When I read the net cash this morning I expected a much
larger fall tbh