Persimmon (H1 trading update)

Persimmon (LSE: PSN) is one of Britain’s biggest and most renowned housebuilders. It builds properties ranging from flats to large family homes located across the UK. The FTSE 100 firm is expected to provide a trading update for its most recent half-year performance ending June 2022 on Thursday 7 July.

Analysts in the UK don’t normally publish earnings previews for six-month periods, so it’s best to compare the firm’s upcoming 2022 first-half numbers to the ones from a year before. The H1 2022 figures can also be useful to determine whether it’ll outperform its FY21 numbers, or even beat analysts’ FY22 forecasts.

In this case, Persimmon is predicted to show slight growth in its numbers as housing supply continues to attempt to match high demand. If the housebuilder posts a better-than-forecasted number on Thursday with positive guidance, it could be on course to beat its financial year estimates.

Entain (H1 trading update)

Entain (LSE: ENT) is an international sports betting and gambling company. It owns brands such as Bwin, Coral, Ladbrokes, PartyPoker, and Sportingbet. Entain will provide a trading update for its most recent half-year performance ending June 2022 on Thursday 7 July.

Based on the earnings preview, Entain expects to have a much stronger second half to its financial year than its first. Nonetheless, a headline beat on its previous year’s H1 results could spell a positive outlook for the firm.

Vistry (H1 trading update)

Vistry (LSE: VTY) is another housebuilder that’s providing investors with a trading update. The Kings Hill-based firm will be updating shareholders on for its most recent half-year performance ending June 2022 on Thursday 7 July.

Just like its peer, Vistry is also expecting modest growth in its numbers. This is expected to come from rising house prices. The key metric to look out for will be its diluted earnings per share metric. A better than expected number could make analysts’ predictions of achieving a much higher EPS later this year possible.

The post Earnings preview: Persimmon, Entain, Vistry appeared first on The Twelfth Magpie.

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John Choong has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Defence manufacturer BAE Systems (LSE: BA) has long been one of my favourite FTSE 100 shares. It looks cheap trading at just over 11 times earnings, and that offers me a tempting buying opportunity. Its civil aerospace division, which makes parts for Boeing, was hit hard by Covid travel bans, but a more robust defence market has compensated. Globally, military spending is expected to rise 2.6% this year.

Management now expects profits to increase by more than 10% this year, with revenues up 5%-7%. The defence and aerospace engineer looks like a key portfolio hold, offering both capital growth and income. It has quickly restored its dividend, after cutting it during the first lockdown, and now offers a yield of 4.7%, covered 1.9 times by earnings.

I’d buy these three FTSE 100 shares

One worry is that commercial aviation still faces strong headwinds, hitting demand for plane parts. Supply chain interruptions could push up costs. Net debt has jumped from £743m to £2.7bn, after the company paid down its pension obligations. I’m not too worried by that, though, and would happily invest £1,000 in BAE Systems today.

I think there are some tempting FTSE 100 shares in the housebuilding sector too, notably Vistry Group (LSE: VTY). It has enjoyed a rip-roaring six months, its share price rising 50% in that time. The five-year figure is a more modest 34%.

Inevitably, Vistry has benefited from the UK house price boom. This was reflected in recent strong underlying pre-tax profits of around £325m, outstripping guidance of £310m. Weekly private sales are up 21% on last year. The group has restored its dividend and yields 3.9%, with cover of 2.4 giving scope for further growth. Yet the market values the stock at just 10.7 times forecast earnings.

I’d buy these shares for the long term

The UK housing rally cannot go on forever, and prices could slow after the stamp duty holiday and furlough schemes expire. The rising costs of materials are also a worry, but this remains one of my favourite FTSE 100 shares and I would invest £1,000 in it today.

Global spirits giant Diageo (LSE: DGE) has been one of the most reliable FTSE 100 shares of recent years. Management now predicts 14% operating profit growth, following a “good recovery” in its prime North American market. It will reward investors by resuming its £4.5bn share buyback and special dividend programme, even though the travel ban continues to hit duty-free sales.

This could be a little premature, given that the company’s net debt is at the top end of its intended range. Another concern is that the stock isn’t cheap, trading at 29.2 times forward earnings. I don’t normally buy FTSE 100 shares with such a high valuation, but I’m happy to make Diageo an honourable exception.

The post 3 FTSE 100 shares I’d buy today with £3,000 appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

FTSE 250-listed Vistry Group (LSE: VTY), formerly Bovis Homes Group, trades at a low valuation of just 5.2 times forward earnings. No UK housebuilding share is cheaper today.

A dirt-cheap UK share I’d buy

Vistry has had a tough 2020, its share price falling by half since the start of the year. The March lockdown hammered the housebuilding sector, with sites closed and the sales market mothballed. Vistry saw first-half completions plunge from 3,371 to just 1,234, as revenue from housebuilding activities crashed from £854m to £344m.

Management has flagged up a stronger second half, with strong forward sales as pent-up demand for housing was unleashed. It has cut jobs, found synergies and suspended the dividend. This allowed management to shrink net debt from £476m in May, to £357.3m on 30 June.

Vistry still expects to make full-year profit before tax of between £130m and £140m in 2020. So why is this UK share so cheap? One reason may be that operating margins are lower than the housebuilder average, at 16% in 2019. This compares to 20.9% for the sector as a whole, according to figures from wealth platform AJ Bell. It still doesn’t pay a dividend, but management has promised one for 2021 with a progressive policy thereafter. Analysts predict Vistry will yield 4.9% next year, covered 3.88 times earnings.

Vistry has underperformed the housebuilder sector this year, and I’m hoping that buying at today’s low price could reward me handsomely when it plays catch-up.

Another top dividend and growth stock

Fellow FTSE 250 housebuilder Redrow (LSE: RDW) is the next cheapest major UK housebuilder share, trading at a dirt-cheap forward valuation of 7.4 times earnings. It also suspended its dividend but is expected to yield 4.1% next year, with plentiful cover.

Redrow enjoyed steady profit margins of 18.3% last year. Earnings looks set to be flat this year, but analysts predict that they will jump 73% next year. Naturally, that depends on the pandemic, but at least the government is keeping the housing market open in lockdown 2.0.

Management is looking forward to a stronger second half of the year, as it shifts its focus from London to its higher returning regional businesses, and higher-spec ‘Heritage’ range of period-style arts and crafts homes.

Today’s property market is underpinned by the government, through the stamp duty holiday and help to buy. There may well be further support to come, this time targeted at first-time buyers. This should help to keep sales ticking over, while extended mortgage holidays and furlough support should help to prevent repossessions.

I’m looking to buy dirt-cheap UK shares like these two before the recovery, rather than afterwards when they’ll be more expensive. I’m hoping that will boost my chances of building a big enough portfolio to retire early, if that’s what I want to do.

The post Top stocks for an ISA! I’d buy these 2 dirt-cheap UK shares to retire early appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Redrow. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The entire building sector has enjoyed a boost this morning from reports that chancellor Rishi Sunak may suspend stamp duty to revive the housing market. Investor sentiment has been further lifted by positive results from the UK’s largest housebuilder Barratt Developments.

The Barratt share price is similarly up 6% after it reported a “strong” forward order book with sales ahead of last year. It also reported a “welcome recovery in internet activity, site visitors and net reservations across both the industry and our business.”

The double dose of good news has boosted all the major housebuilders, with Crest Nicholson Holdings, Redrow, and Vistry also climbing. Yet I reckon these could still be FTSE bargains because the recovery has further to run.

I remain a fan of the housebuilders as a source of long-term income and capital growth. Yet the sector has been through a bumpy time since Brexit. Coronavirus bought the housing market to a halt. But one thing hasn’t change. Demand for property will remain high as the population rises, and supply cannot keep up.

I’d buy these FTSE bargains

A week ago, I tipped the Barratt and Crest Nicholson share prices, hailing them as top FTSE 100 bargains worth buying ahead of the recovery.

Persimmon (LSE: PLC) also tempts me. I tipped the FTSE 100 stock at the height of Covid-19 gloom in early April after it mothballed construction sites, stopped selling homes, and cancelled its interim dividend.

At the time, the Persimmon share price stood at 1,666p. Today, it trades at 2,403p. That’s a rise of 44%. I’m no stock-picking genius. I simply follow the Motley Fool philosophy of hunting down top stocks at times of crisis, with the aim of holding on for the rebound. This strategy is proving itself yet again.

I’d still buy Persimmon today. Despite the recent recovery, its stock remains a third below its pre-coronavirus crisis peak in January. It trades at 8.5 times earnings, if you can trust the P/E ratio in these strange times.

This stock is cheap after the market crash

Fellow-housebuilder Vistry Group (LSE: VTY) looks even cheaper at 6.71 times earnings. It might offer an even better buying opportunity, as the share price is still 50% below January’s peak.

Again, the group had to scrap its dividend to conserve cash, but at least it compensated investors by issuing £60m of shares in lieu. I wish more companies had done that.

The FTSE 250 group was going great guns before the crisis, with profits up 12% in 2019 and margins hitting 17%. In May, it reported a forward order book totalling £827m. It does have net debt of £476m, but this is balanced by committed banking facilities totalling £770m, with well-spread maturities out to 2027.

Housebuilding still looks like a tempting sector for long-term investors looking to benefit from the stock market crash.

Or you may prefer this suggestion…

The post £2k to invest after the stock market crash? I’d buy these 2 FTSE bargains before the recovery appeared first on The Twelfth Magpie.

More reading

• Down 63% and yielding 6.3%! Is this FTSE 100 share a brilliant bargain?
• Could Andy Burnham boost this beaten-up FTSE 250 stock that’s crashed 80% in 20 months?
• This 5.5%-yielding income stock’s at a 13-year low and cheap to-boot! Time to consider buying?
• Down 65% but yielding 6%! Is this FTSE 100 dividend stock an unmissable bargain?
• What could an Andy Burnham government mean for these FTSE 250 stocks?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.