"Is this "affordable" housebuilder and land trader LSE:GLE:MJ GleesonÂ set for continued growth despite interest rate poised to rise?Following latest prelims to end-June the FTSE Small-cap stock is up 8% to 670p, still below its 2017 high of 705p, ..."
can't find too many concerns with this statement, and the twin track approach of selling affordable housing in North, with speculative plot options in the South for future planning/sale just seems right at the moment. Plus the lifted Divi - this share price has been a bit meeh lately, but will hopefully jump this week...
"House prices remain a favourite dinner party talking-point, but sentiment toward housebuilders has ebbed and flowed in recent times, with the sector hardest hit in the immediate aftermath of the Brexit vote last June.However, those firms ..."
several builders affected by sentiment on house prices recently which have been a mixed bag
Carney and co seem to be muddying the waters re interest rates with every breath - previously it was almost crystal clear there would be no rises til 2019
builders generally underperform during the summer.....why I got out at about 630p and went (prematurely) short on FTSE.....while banked gains on GLE, am only a couple of % up with 3UKS......but then I do expect some fireworks over the summer.
number of immigrants heading back home apparently increasing and those businesses relying on them......building, farming (crop harvesting) nursing (foreigners registering professional qualifications down 96% allegedly year on year) will suffer as have to pay more / margins compress.
TBH could quite easily see 530p here over the summer which would be a potentially good buying opportunity but if things pan out more smoothly over the next couple of years could quite easily see 750p+. I just don't have the conviction to hold which is why I took 630p and really just observing the market at the minute
My thoughts were that for whatever reason, the share price of GLE had not responded to the historical good news in the way that I had expected...over quite some time. That led me to the conclusion that MY basis for holding the share was possibly flawed. Add to that the scenario that markets have had a fairly steady and prolonged increase over the last 5 months which has to come to and end at some time.
My intention is always to do a mini "sell in May" type thing where the proceeds from any sales or dividends are not re-invested until there has been a "blip" or correction. If that doesn't happen then I will look to re-invest over the autumn. (we are only talking of about 10% of total holdings - some core holdings are held VERY long term).
Put those 2 things together and I decided to sell GLE (possibly wrong decision, and certainly premature) and with a small portion of my portfolio decided to go short on the overall market when Trump had his healthcare bill blip and had to withdraw from scrapping Obamacare.
Do I think GLE will go up in price? I honestly don't know because my previous assessments weren't correct, but still made money. If the share price had reacted as I expected then I would probably have repeatedly added to my holding but getting it right with my reasoning being wrong....er no thanks - take the profit and try and learn.
At least, as of now, I have made on GLE transactions and haven't lost (more than a couple of pints) on the short.
Statement from Hallam Land subsidiary in the Henry Boot results this morning suggests you may have been a bit too early: "In the early months of 2017, house builders continued to show strong interest in high quality sites and good market areas." And they are biased towards the (supposedly stagnant) North/North-East, so Gleeson's land bank darn sarf must be in significant demand?
Those following this board will know that I haven't been totally convinced re GLE share price movements so decided to bank my profits yesterday and have gone short x3 on FTSE within my ISA using 3UKS. (Don't have CFD account or skills for it! )
Yes, it's a bit of a gamble but I see more downside to FTSE from now till Easter /May than upside to GLE in that timeframe. All other dividends or sales are being held as cash as likelihood of turbulence draws ever closer????
I'm with this one more for its landholdings, and speculative planning permission efforts on them, than their housebuilding. I suspect one or two of them getting Inspectors' approval on appeal will ratchet up the price.
I'm sure he knows a lot more than me as well...... !
But if a share under performs both it's sector and the index it is in over the last year, despite issuing decent reports, one has to start asking questions....after all no-one is infallible (Warren Buffet with Tesco would be an example ).
It could be that it is just totally out of fashion and will come absolutely roaring back, but if we have (allegedly) confidence (rising markets) and a decent report with 44% increase in divi and that doesn't get things moving.......
Another factor could be that it is still one of the lower yielding house builders ????
1. A large portion of it's homes were sold under help to buy previously and this has now stopped. Yes the mortgage market may be in a slightly better position than when HTB was launched but this is still a slightly negative development
2. The share price just doesn't seem to react to positive news in the way it probably should. Maybe this is just an impression and I am wrong, but at the minute this is the house builder that is most under pressure to be sold and re-invested elsewhere. I will see what the forthcoming days / weeks hold in respect of price movements following these interims but if it stays fairly rangebound then I may have to look elsewhere.
I really can't pick fault with this business and its broker has increased the price target again.Not only has it expanded well within its means but remained very profitable and cash positive. Probably the most important thing is that it is providing affordable quality homes as good as any of the big builders but substantially cheaper. They may not be in the best locations but 30 to 40% savings make these homes attainable for anyone in full time employment. I have been a long term holder of these shares ever since the existing high quality management team commenced their involvement. The dividend has now improved and I see no reason why the share price shouldn't reach the brokers target and beyond.
Obviously one of the Non-Execs didn't think it has that much more to go, selling a million shares yesterday (but less than 10% of his holdings, if i read it right). On a much much smaller scale, GLE has had planning refusals/knock-backs on a couple of speculative sites in SEast recently i have seen in local business news, and i similarly took profits on half my SIPP holdings on Weds...banking a 50% rise in a year.
"A focus on delivering low-cost homes quickly cancelled the savage post-referendum plunge at LSE:GLE:MJ Gleeson, and a set of strong full-year results has pushed the housebuilder back close to all-time highs. It's rallied nearly 60% since June and ..."
You might well be right.... then again aiming and achieving are not necessarily the same thing. It has come an awful long way and, well as stop is a stop, a profit is not 100% real until it's realised.
I have to be happy with the return I've had particularly given the state of the market in general. GLE will still be on my radar just, with P/Es approaching 25, the air is already pretty thin so you don't have to miss by much before there's a significant reaction.
They are aiming to triple the size of the house buidling division - that's the scale of the opportunity uncovered. There is every chance of further progress towards that goal by incrementally opening new regional offices near to current ones -a creep effect. With government support behind the sector and a growing economy I see a really good future over next few years. I was going to sell at £6'but have decided to hold and watch the story unfold .
Or just massively overbought in the 1st place. Me, I like what the do and the inner city brownfield low cost(ish) stuff is going to be in demand for the foreseeable future but it is limited by site availability and this one has come a long way over the past few years, probably ridiculously unfashionable a few years ago to ridiculously fashionable in recent months. The improved financials are good but in no way justify a 4 fold increase in the SP......... so some of us have been watching with mild disbelief at the extent of the rise but reluctant to sell something with this kind of momentum so holding but dragging our stops up tight in behind. Mine got triggered last week at £6 and I suspect I am not alone.
I will be looking for a chance to buy them back but, it's got to stabilise, everything has to stabilise before that happens.
"Is LSE:GLE:Gleeson in a sweet spot? This Â£300 million FTSE SmallCap housebuilder has a twin strategy for low-cost homes in the North of England and strategic land trading in the South - an approach currently doing very well and which looks ..."
Don't worry this business is going gangbusters and will continue to grow strongly this year , opening new offices in new regions. There is little competition at their end of the market and costs are being well controlled so I would sit tight and ride the tiger !!
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