Hobson: Housebuilders a Good Bet Despite Volatility

THE WEEK: Morningstar columnist Rodney Hobson looks beyond the inconsistent share price performance of listed housebuilders

Rodney Hobson 8 September, 2017 | 12:12PM
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Bovis Homes

What is it about results from Barratt Developments (BDEV) that so often cause its shares to fall sharply? Certainly not bad news, which we have not had from the housebuilder for best part of 10 years. Nor is it warning noises from the rest of the sector.

The 4.6% drop in the share price that immediately followed full-year results this week was utterly baffling.  Pre-tax profits were up 12% in the year to June 30 as it built more homes than any year since the crash of 2008. The good news is that it is building more houses itself and fewer through joint ventures, which means all the profit goes to Barratt.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Barratt Developments PLC680.00 GBX0.32
Berkeley Group Holdings (The) PLC4,261.00 GBX-0.28
Frasers Group PLC639.00 GBX1.27
Redrow PLC678.60 GBX-1.08
Taylor Wimpey PLC156.60 GBX0.77
Vistry Group PLC1,220.50 GBX1.29

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.