Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    StockNews24StockNews24
    Subscribe
    • Shares
    • News
      • Featured Company
      • News Overview
        • Company news
        • Expert Columns
        • Germany
        • USA
        • Price movements
        • Default values
        • Small caps
        • Business
      • News Search
        • Stock News
        • CFD News
        • Foreign exchange news
        • ETF News
        • Money, Career & Lifestyle News
      • Index News
        • DAX News
        • MDAX News
        • TecDAX News
        • Dow Jones News
        • Eurostoxx News
        • NASDAQ News
        • ATX News
        • S&P 500 News
      • Other Topics
        • Private Finance News
        • Commodity News
        • Certificate News
        • Interest rate news
        • SMI News
        • Nikkei 225 News1
    • Carbon Markets
    • Raw materials
    • Funds
    • Bonds
    • Currency
    • Crypto
    • English
      • العربية
      • 简体中文
      • Nederlands
      • English
      • Français
      • Deutsch
      • Italiano
      • Português
      • Русский
      • Español
    StockNews24StockNews24
    Home » As the Persimmon share price barely moves on positive trading, is the market missing a chance?
    News

    As the Persimmon share price barely moves on positive trading, is the market missing a chance?

    userBy userMay 1, 2025No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Image source: Getty Images

    The Persimmon (LSE: PSN) share price has been picking up in the past few weeks, but it’s still down more than 40% over the past five years.

    In a trading update on AGM day Thursday (1 May), CEO Dean Finch spoke of “an improved private sales rate, an increase in average selling prices and further growth in our network of outlets.”

    He told us forward private sales are up 17% on last year. And the company’s guidance for 11,000 to 11,500 completions this year remain unchanged.

    There’s so far been no impact from “recent geopolitical uncertainty.” Though how President Trump’s trade wars might affect domestic home construction in the UK is unclear. I suspect possibly some threats to supply chains, and perhaps a weakening of sentiment from potential buyers who might postpone their planned purchases. We’ll have to wait and see on that one.

    The share price reaction on the day? At the time of writing, it’s largely unmoved.

    Development plots

    Persimmon first came to my attention many years ago, during a past downturn in the property market. At the time, rather than reining in spending, the company was investing in building land when prices were down. That struck me as a sensible long-term strategy.

    This time, Persimmon reports “good planning success with 2,781 plots achieving detailed or reserved matters approval in the first quarter.” That’s up from 1,457 in the same quarter a year ago. And again, to me it shows the company is using a weak spell in the market to build up its long-term ambitions.

    Total land owned and under control amounted to approximately 83,800 plots at 31 March 2025, a bit above 2024’s 82,500. With annual completions expected at around the 11,000 mark, that strikes me as a solid bit of forward planning.

    Investment case

    I won’t buy any more Persimmon shares as I think I already have enough. But if I didn’t, I’d be seriously considering going for some. That’s largely down to what I see as an industry with pretty much unstoppable long-term momentum. And a short-term undervaluation.

    The valuation might not be as attractive as it could be, with a forward price-to-earnings (P/E) ratio of 13.5 and a 4.6% dividend yield. But forecasts show both improving substantially in the next few years.

    And a great company at a fair price rather than a fair company at a great price — that’s what billionaire investor Warren Buffett says we should want. I think we might just have one of those here.

    Still pressure

    We don’t know how many of the quarter’s reservations were rushed to get in ahead of April’s stamp duty rise. Mortgage approvals are still tough too, with inflation and interest rates stubbornly high. Still, better deals are increasingly appearing.

    Economic uncertainty coupled with a valuation that suggests ‘fair but not screaming cheap’ means I could see more share price weakness for a while yet. But I’m holding firm for the long term.



    Source link

    Share this:

    • Click to share on Facebook (Opens in new window) Facebook
    • Click to share on X (Opens in new window) X

    Like this:

    Like Loading...

    Related

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleWarren Buffett’s net worth just increased by $11.5bn. Here’s how I’m trying to copy him
    Next Article 2 dividend stocks I’m staying well away from… for now
    user
    • Website

    Related Posts

    £10,000 investing in the top FTSE 100 growth stocks last year is now worth…

    May 23, 2025

    Just £1,000 invested in Rolls-Royce shares during the pandemic is now worth…

    May 23, 2025

    Just how much lower can the JD Sports share price go?

    May 23, 2025
    Add A Comment

    Leave a ReplyCancel reply

    © 2025 StockNews24. Designed by Sujon.

    Type above and press Enter to search. Press Esc to cancel.

    %d