This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
As we like to mention from time to time, the Housebuilding sector really is one of the most loved by retail investors. Whether it’s the fact that their names are sprawled across buildings wherever you go, or perhaps even that you are able to quite literally see your investment grow right before your eyes, there is always demand for shares in the UK’s building giants.
Which is why on Monday, Bovis Homes’ Full Year 2016 results may have alarmed investors after not producing the numbers that many had hoped for. The company, who lost their boss in January having issued a profit warning, saw shares sell off 10%, something that no investor wants to see, in reaction to falling production levels despite rising revenue.
But there could be sunshine just over the horizon for housebuilding shareholders as two UK 100 giants release their FY 2016 numbers next week.
Persimmon – reporting on Monday – began their last fiscal year with some disappointing results, having seen a negative share price reaction to both their Q1 and Q2 trading updates. Yet even after these poorly received updates, the company’s half year results in August saw a 4.2% share price rally as investors were pleasantly surprised of a minimal Brexit impact. Since then, Persimmon has seen positive reactions to their two latest trading updates, including a 7.2% rally in reaction to January’s Q4 release where the company stated they were expecting a rise in completions and average selling prices in 2016. Could this investor enthusiasm spill over into their full 2016 results too?
Having closed flat after reporting their Q1 earnings back in April 2016, Taylor Wimpey – reporting on Tuesday – has since seen its share price rally in reaction to both their Q2 and Q3 trading updates, seeing reactionary gains of 6.7% and 2.1% respectively. Q4 results, however, prompted a negative reaction in January, in which shares closed 2.5% weaker. The management is currently expecting profits to be at the upper end of market forecasts next week. Will full year results see another lukewarm reception to the figures or will the strength throughout the rest of the year see the FY numbers surprise to the upside?
Persimmon has mounted an incredible recovery from Brexit, with its share price rising over 40% since their June lows, yet the shares are still trading over 4% below their 23 June closing price. Could the gap be filled after the results are released on Monday?
Meanwhile Taylor Wimpey’s share price has recovered an astonishing 37.5% since their post-Brexit lows, however shares are still trading 9.3% below the level that they closed at on the day before the UK’s EU referendum. Last year the company’s share price saw a muted rally of 0.5% in reaction to full year 2015 results. Could the 2016 results next week provide shareholders something to celebrate after a memorable year?
At Accendo Markets, we make sure our clients are informed of results from the UK’s biggest companies before markets open, so that we know that they can make informed decisions in plenty of time. Does your current broker give you that kind of attention? If you’re finding yourself hesitating while answering that question, why not give our in-house research a trial by signing up here. At worst, you might click your mouse a few more times than usual in the morning. At best, your eyes could be opened to a completely new range of trading opportunities that completely change your approach to trading. If you were to ask me, I’d say that’s a few minutes put to very good use!
Matthew Grice, Trader, 24 February 2017
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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