Category Archives: $BDEV

UK Housebuilder $TWOD (Taylor Wimpey), $BDEV (barratt) FV update following help to buy budget.

George Obsorne announced a furtjher boost to UK housing market, offering first time buyers a help to buy ISA – the scheme can pay anything between 400 and 3000 pounds from the government…

This seems a bit a of an election gimmick – given the cost of houses today – and reflected in the very modest rally in UK Housebuilder shares…

The real risk for holders of UK Housebuilders is the Tories losing the general election and the next government scrapping all the help to buy schemes – could see a 20% drop in the shares if this happens.

$BDEV FV = 520 4.25% Dividend Yield
$TWOD FV = 180 6% Dividend Yield

Taylor wimpey still cheap to Fair Value, but would not buy ahead of the election unless you are sure the tories will win.

If you have a core position, hold for now – the tories have a lead in the polls, but it this changes trim your position.

2CentView has a core position in $TWOD (Taylor Wimpey)

UK Housebuilders hit their FV’s – take some profit year – next year my estate agent..

reckons that the Help to Buy scheme could be cut short if the Cameron loses the election.

FVs:

$BDEV = 450 (from 425)
$TWOD = 135 (from 125)

Look to take some profit around these levels but keep a core position for now – they still have great yields and have done very well this year both up over 20% this year with dividends and capital returns.

Be careful as we come up to the next general election as there is a risk the help to buy could be cut if the tories lose.

2CentView has a core position in $TWOD.

UK Housebuilder down 25% from their highs…is it over done?

$BDEV FV = 420 (Barratt)$TW. FV = 125 (Taylor Wimpey).

These were on a high following governments extension of the Help to Buy Scheme, but the prospect of higher rates sooner has seen a sell off!.

Higher rates sooner rather than later, should see a flattening of the yield curve in the 3-10Y area, which is good for housing market long term and should see lower 5Year fixed rates.

Barratts report 12th may – may be worth a margin trade in the hope for some good numbers.
Buy here at 350, Take Profit target 400, Stop 320.

@WhereKitWan $BDEV – Suggest the following strategy:

FV on $BDEV=390. However, there is chart resistance at 340 so would take half profit at 340 and look for break out above this level towards 380. So fast money trade is as follows:

buy at 315

sell half at 340

Sell half at 380

Cut at 303

If you assume 0.5 probability of price reaching 305, 0.25 at 340 and 0.25 380 your risk reward ratio on the trade is

Profit= 25*0.25*.5 + 65*0.25*.5 = 11.25

Loss = 12*0.5 = 6

So just under 2:1

Good one for a Spread Bet

As for your question on stocks <100 – again PRICE Should not be factor when buying stocks – we think that when buying penny stocks we buying something cheap! But it is better to buy NEXT at 50 quid rather than Debenhams at 90p!