Financial Trading Blog
Stock of the day 04/09/2015 – The Berkeley Group Holdings PLC
Will its interim management statement next Tuesday add to the celebrations, or will it spoil the party?
Things didn’t get off to that great a start in 2015; after opening the year at £24.57, the stock soon fell to a 2 month low of £22.65 by the end of January. However, from then on there have only been a few weak moments in Berkeley’s trading. By the start of March the stock had risen to £26.48, only to loiter within a £26 to £27 trading bracket throughout the rest of the month and the majority of April. Pre-UK election jitters then began to take their toll on Berkeley, and by May 7th the stock had fallen to a 3 month low of £24.31.
(Source: IT-Finance.com 04/09/2015)
However, as with the rest of the housing sector, Berkeley enjoyed a rather spectacular boost when the Tory win was announced as it jumped nearly 10% on the day of results to hit a then 2015 high of £27.29. The post-election goodwill showed no signs of slowing down throughout the rest of May, and by the start of June the company was trading at £31.63 after crossing the £30 mark for the first time in its history.
Things plateaued somewhat in the first 2 weeks of June ahead of Berkeley’s full year results, results, however, that certainly proved to be worth the wait. A 42% increase in pre-tax profit to £539.7 million was higher than expected, and came off of a massive 32% jump in revenue to £2.12 billion. Of course, investors were more than pleased with these figures, pushing the stock 11% higher in the process to another fresh high of £35.17.
The Greek nightmare that was July took its toll on Berkeley, taking it below £34 until the start of August, when the brief period of post-Greece, pre-China growth allowed it to reach an all-time high of £35.70. Though the August China-havoc did carry Berkeley to £30.68 towards the end of the month, the company was one of the biggest rebounders on the days when the FTSE was in good health, and the news that the company was finally joining the UK index’s elite sees it at a current trading price of £34.12 (IT-Finance.com, 04/09/2015).
Berkeley Group Holdings has a consensus rating of ‘Hold’ with an average target price of £33.68.
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