Financial Trading Blog
Stock of the day 16/03/2016 – Bellway PLC
After hitting an all-time high of £28.88 as 2015 wrapped up, cementing an astonishing 12 months for the housebuilder which saw it add nearly £10 per share, the New Year didn’t get off to the best start for Bellway, the stock slipping to a month low of £24.86 by mid-January. The second half of the month did see a rather robust recovery, however, and by the start of February the stock was only a smidge below its December peak at £28.37. That high didn’t last for long, however, the year’s losses only intensifying across the start of February, causing Bellway to swiftly fall past its previous 2016 low to hit a 2 and a half nadir of £25.55.
(Source: IT-Finance.com 16/03/2016)
Things did pick up on the 10th February, however; the housebuilder’s latest trading update saw an 11.6% increase first half sales year-on-year. Factor in a 17% surge in the average selling price, to £257,000, and Bellway promised investors that its housing revenue should jump by around 30%, taking it above £1 billion, for its fiscal first half.
Yet whilst this helped the stock climb back to £26 by the start of March (with a dramatic, Boris Johnson Brexit-backing inspired fall in between), a sharp drop as that month began once again saw Bellway hitting new lows, touching £23.23, its worst price for 4 months by the middle of the month despite a broad recovery (or, at least, consistent lateral movement) from the markets in general. Bellway has a current trading price of £24.65 (IT-Finance.com, 16/03/2016).
In terms next Tuesday, after promising so much with its February update Bellway will be in trouble if it doesn’t deliver some blockbuster growth with its half year figures, investors looking for a super surge in profits to match that reported 30% increase in revenue.
Bellway PLC has a consensus rating of ‘Buy’ with an average target price of £28.95.
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