Housebuliding shares slumped after the Brexit vote, but theyve performed well today on first-half results from Persimmon. Figures are up across the board, and chief executive Jeff Fairburn said that despite the referendum result, customer interest since then has been robust.
A solid recovery
Housebuilding shares bottomed out on 6 July, and if you managed to time your buying right youll be sitting pretty today. Shares in Bellway (LSE: BWY), for example, have climbed by 38% since the crash, to 2,337p as I write, including a 5% gain today.
Thats still a fall of 14.5% since referendum day though. Is there any recovery left if you buy now? Id say yes, because I really dont think therell a significant long-term effect from leaving the EU after all, the UKs chronic housing shortage wont suddenly vanish, will it? Bellways earnings and dividend forecasts have been scaled back slightly in the past couple of months, but not by a lot, and theres still a largemajority of analysts putting out a strong buy recommendation on Bellway.
Expectations for the year just ended in July put the shares on a P/E of only 7.7 with a predicted dividend yield of 4.3%. Granted, theres a flat year for earnings forecast for 2017, but thats surely way too cheap for a company in a solid long-term business. Results are due on 18 October.
More of the same
We see the same picture at Barratt Developments (LSE: BDEV), whose shares are up 3.6% to 480p so far today and up 44% since 6 July, but still down 17% post-vote. The last trading statement we got from Barratt, on 13 July, reported a 5.3% rise in completions and estimated a 20% rise in pre-tax profit, with full results expected on 7 September.
At the time, chief executive David Thomas did say it was too early to understand the possible effects of Brexit, but he pointed to good mortgage availability and the ongoing undersupply of new homes as reasons to be cheerful we remain confident in the positive fundamentals of both the housing sector and our business, he said.
Again, though theres a slowdown expected in 2017, the latest forecasts still put Barratt shares on a P/E of under nine for the year just ended, with a big 6.7% dividend yield on the cards. The dividend wont be as well covered as Bellways, but the shares still look very attractive to me.
Is biggest best?
My third pick today, and biggest of the three, is Taylor Wimpey (LSE: TW). After a 3.5% price rise today, to 164p, Taylor Wimpey shares are up 41.5% since 6 July though still down 14.5% since the vote.
Again were looking at a modest downgrading of forecasts, but we also still see a robust buy consensus from the brokers. And again, fundamental valuations look very low with forward P/E multiples for December 2016 and 2017 of under 10 not as low as the other two, but there are better dividends forecast, yielding 7% and 7.8%.
Taylor Wimpeys year ends in December, and first-half results at the end of June showed another year of solid growth. It was only a very short time after the referendum, but according to chief executive Pete Redfern, customer confidence metrics were still solid.
Will your investments survive Brexit?
The Fool’s top experts have been pondering how best to invest in this post-referendum world, and they’ve put together their brand new Brexit: Your 5-Step Investor’s Survival Guide.
Plenty of people have been panicking since the vote, but that really is the last thing you should be doing now. Instead, get yourself a copy and read and digest these five key steps, and you’ll be able to see far beyond any short-term fears.
What will the report cost you? Not a penny, not a euro, not a cent. Click here for your copy now.
Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
