Financial Trading Blog
Stock of the day 01/02/2016 – Foxtons Group PLC
After starting the second half of the year hovering around the £2.50 mark (around 40p away from the post-UK election highs struck in May), Foxtons began its second major fall of 2015 at the beginning of October. That drop, which took the stock from £2.46 to £2.22 in the first three weeks of the month, was then compounded by the company’s third quarter results.
(Source: IT-Finance.com 01/02/2016)
Placing the blame on rising house prices (at the time the average price of a house in London had surged 8.3% year-on-year to £630,000) and increased stamp duty costs spooking potential buyers, Foxtons saw a 3.7% fall in property sales commissions to £52.1 million for the first 9 months of the year. However, things weren’t all bad; the company still saw a near 13% increase in Q3 sales commissions (to £18.5 million), a 1.6% jump in turnover for the first 9 months of 2015 (to £114.5 million) and claimed it remained on track to open 5 to 10 new branches a year.
Yet investors weren’t impressed, and by the end of November Foxtons was trading at a 10 month low of £1.71. Things did gradually begin to pick up as December got underway, despite the fact that the company was shuffled out of the FTSE250 at the start of the month, and Foxtons ended the year at £1.89. However, after tickling the £2 mark in the first fortnight of 2016 the stock soon joined the market-wide decline, hitting a fresh 10 month low of £1.54 on January 21st. The stock now sits at a current trading price of £1.67 (IT-Finance.com, 01/02/2016).
Foxtons Group PLC has a consensus rating of ‘Hold’ with an average target price of £2.26.
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