Financial Trading Blog
Stock of the day 06/08/2015 – Bellway PLC
After a solid surge at the end of 2014, things didn’t get off to the greatest start in the New Year, with a sharp decline across the first half of January taking Bellway from a yearly opening price of £19.39 to a 2015 nadir of £16.86. However, a positive trading update in February, with especially impressive growth in off-plan property sales and northern UK house building, lifted the stock above £20 for the first time.
(Source: IT-Finance.com 06/08/2015)
A brief wobble at the start of March saw Bellway re-trace its steps back to the £19 to £20 trading band, but stellar half year results at the end of the month, including an 18.7% jump in revenue to £831.2 million alongside more-than-doubled pre-tax profit of £159 million. A juicy 25% increase in dividends per share £0.56 cemented Bellway’s healthy half year figures, and pushed the stock to yet another all-time high of £21.29.
March and April were pretty limp for the property developer, with the pre-election jitters taking their toll on its price. It had slipped to £19.39 just before the votes were cast, only to jump over 7% to a new high of £22.53 as the Conservatives strolled back into no. 10. This upswing carried through the rest of the month, and another positive update at the start of June, with a 22% increase in its order book year-on-year, helped (after a brief wave of profit taking) to lift the stock to its current all-time high of £24.61 at the start of July.
The increasing likelihood of a UK rate hike by the end of 2016’s first quarter caused a few nervy trading days across July, with the housing sector fearing the impact of increased mortgage costs, but the start of August has seen Bellway return to form reaching a near-high current price of £24.33 (IT-Finance.com, 06/08/2015).
The company isn’t really showing any signs of slowing down, and for its fiscal year ending July 31st analysts are expecting Bellway to post a 16% jump in full year revenue to £1.72 billion alongside a 38% leap in adjusted net income of £265 million. This leaves the company with a consensus rating of ‘Buy’ with an average target price of £25.20.
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