Lockdown Deters Investors but not House Buyers

The Week: Housebuilders are still selling houses, so why are investors still selling shares, asks Morningstar columnist Rodney Hobson?

Rodney Hobson 10 July, 2020 | 9:47AM

The Week

Paying back government furlough cash is a double bonus: it creates goodwill and it sends a signal that a company’s finances are in better health than they might have been. Barratt Developments (BDEV) has joined a remarkably long list of companies taking this path, one that amounts to a good deal more than virtue signalling.

Home completions have fallen by nearly 30% at Barratt, the UK’s largest housebuilder, though perhaps the miracle is that 12,604 homes were completed in the 12 months to the end of June, a period that covered the whole of lockdown. Equally surprising is that average prices actually edged up compared with the previous 12 months.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Barratt Developments PLC6.73 USD-4.17
First Derivatives PLC2,830.00 GBX0.71
FirstGroup PLC61.95 GBX0.98
Persimmon PLC37.15 USD-0.80
Vistry Group PLC10.05 USD46.72

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.

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