When I buy FTSE 100 shares — or indeed any other stock — I’m in it for the long haul. Stock markets are famously volatile, but that’s the price investors pay to target substantial wealth. The most successful stock pickers stay invested whatever hiccups come along.
Making knee-jerk decisions following new events can be expensive in the long term. It’s why I continue to hold Persimmon (LSE:PSN) shares in my portfolio. Want to know why?
Market slowdown
Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
Warren Buffett
I was hoping 2026 would be a better year for housebuilder Persimmon. Receding inflation meant several crucial interest rate cuts were expected, stimulating housing market demand. It took less than two months for my hopes to fall apart.
Why? The market is already exhibiting a sharp slowdown due to the Middle East conflict. Halifax data shows annual house price growth halved in April from the previous month, to 0.4%. With concrete steps towards a US-Iran ceasefire remaining elusive, buying activity could remain subdued.
Keeping the faith
Yet I’m not walking away from Persimmon, even though the strong share price recovery I was expecting appears in tatters. Firstly, the homes market remains largely robust despite these fresh pressures, reflecting demand that continues to outstrip supply.
As Halifax notes,
while activity is likely to cool in the near term, the underlying picture remains one of relative stability, supported by wage growth that continues to outpace house price inflation.
Looking further out, the housebuilding sector still has explosive profits potential in my opinion. The UK needs at least 300,000 new homes a year to meet its rapidly growing population, according to industry forecasts. And Persimmon’s scale and focus on more affordable homes puts it in great shape to capitalise on this opportunity.
The FTSE 100 company is the country’s third-largest housebuilder by volume behind Barratt Redrow and Vistry. For 2026, it is planning to build between 12,000 and 12,500 new homes.
A dip buying opportunity?
Since 1 January, Persimmon’s share price has dived 17% in value to £11.32. Though the risks have risen, is it possible the market could have overreacted? I think it’s possible.
One reason is that the builder’s model could support strong sales even if the broader market slumps. As Hargreaves Lansdown notes,
since Persimmon’s houses are typically priced around 19% below the newbuild national average, sales tend to be more resilient in times of uncertainty
What’s more, Persimmon is one of the UK’s most vertically integrated housebuilders, manufacturing a significant share of the materials it uses like bricks, timber, and tiles. The result? It’s better protected from rising inflationary pressures, helping to protect margins.
In my view, recent share price weakness represents an attractive dip buying opportunity. Persimmon shares now trade on a price-to-book (P/B) ratio of 0.9, which is well below the 10-year average of 1.8. On balance, I think it’s one of the best FTSE 100 value shares to consider.
