UK HomeBuilders: Good shorts in a Crash?

Some valuation measures...



Judge Jury - 22 Dec'05 - 21:24 - 1100 of 1107


If you were thinking that the price increases in the last couple of days has closed the valuation gap between WMPY and the rest of the sector - think again. WMPY is still cheap cheap cheap. Here is the data:

2006 PE
Barratt - 8.8x
Bellway - 8.2x
Bovis - 10.2x
Persimmon - 9.7x
Redrow - 8.9x
Taylor Woodrow - 7.9x
Wilson Bowden - 8.5x
Average ex-Wimpey - 8.9x
Wimpey - 7.1x
Conclusion: WMPY trading at a 20% discount to the sector

2006 dividend yield
Barratt - 3.1%
Bellway - 3.0%
Bovis - 3.9%
Persimmon - 2.7%
Redrow - 2.7%
Taylor Woodrow - 3.7%
Wilson Bowden - 3.1%
Average ex-Wimpey - 3.2%
Wimpey - 4.0%
Conclusion: WMPY yielding 25% more than the sector

Price to book (latest reported)
Barratt - 1.77x
Bellway - 1.61x
Bovis - 1.66x
Persimmon - 2.73x
Redrow - 1.87x
Taylor Woodrow - 1.54x
Wilson Bowden - 1.42x
Average ex-Wimpey - 1.80x
Wimpey - 1.38x
Conclusion: WMPY trading at a 23% discount to the sector

The price rise has been no more than a sector re-rating. Most welcome, sure. But I am still looking for WMPY to narrow its discount to the sector.