Howdens Reports FY22
Period end – 25th December 2022
Market Cap £3.99b
Price – 717.4p
I like Howdens. I redevelop properties and I constantly work and converse with joiners. Howden’s seems to be highly regarded in the industry.
Following this business gives a good guide on how the property market is doing overall and things seem to be doing quite well.
2023 plans to gain market share are on track with the acquisition of Sheridans Solid Work Surfaces contributing to this. The business is expanding ranges currently underrepresented such as high-value kitchens.
The rollout of new stores is going well with the expansion into the Republic of Ireland and France.
The company sounds upbeat going forward. The company states, “The fundamentals are robust and strong” and “Howdens is in good shape”.
Revenue came in 10.8% higher than in 2021 at £2319m. 2021 was an abnormal year for the market as the economy went crazy with customers spending stimulus on kitchens, so it’s good that Howden compares trading to more normal times of 2019, when revenue in 2022 came in 46.4% higher.
Pricing has been raised and passed successfully which shows pricing power.
The company is debt free with £308 in cash and a £150m banking facility and unaffected by the possible risk scenarios outlined by management.
Inventory has risen by £70m to £373.3m inventory as specific mitigation against supply chain disruption in the future.
Estimate EPS seems to have been 55p-56p but has beat today coming in at 65.6p. Excellent.
You would have thought following the media, Howden’s would have firmly confirmed a slowdown in the property sector but nothing of the sort has been reported today. This is a well-run, highly regarded business moving forward, H2 profits were higher than H1 which could show confidence in the economy is improving.
The company likes to trade in the 15-16 PE range historically, but I am mindful of the fact that the 10y risk-free rate and interest rates have risen in the past year changing what investors typically wanted to receive as compensation from Howdens. FY23 estimated EPS was due to decrease by 12.5% to 48p from 54p, with EPS coming in today at 65p should we still set a decrease of 12.5% to 56.8p. How bad will the economic turndown be, if any? The sentiment seems to change daily. As Howden’s is in an uptrend, I will look for a clear indicator to get in or wait for a pullback.
A well-run, debt-free company with increasing profits ticks my boxes, I think a target of 770-780 could be achieved in current market conditions. Not the best reward but good enough for the watchlist.
This is an overly complicated business with too many moving parts that I don’t understand, but as a swing trader, this is not a problem.
What I do know is BAE is, amongst other things, a defence company supplying air, sea, land, and intelligence systems to many countries around the world that are currently increasing their defence budgets in the wake of a possible new cold war, or continuation if that’s how you see things.
The company has seen an increase in revenue and record orders, but operating profit is flat today affecting bottom lines with an estimated EPS of 54p missed coming in at 50p, I suspect this is due to high inflation. BAE informs us that countries are indeed increasing defence budgets and hopefully most of the work will be going in their direction.
The US is BAE’s Largest customer contributing 43% to revenue followed by the UK, Europe, Saudi, Qatar, and the rest of the western world.
BAE doesn’t only trade in defence it also works with commercial companies such as airlines and informs us today of the growing flying hours performed by the aviation industry which could have a read across to the airline stocks.
The company has £2b of debt compared to cash of 3.1b and a pension benefit that has just moved into surplus.
The company has raised its dividend with the full year coming in at 27p.
I find it difficult to compare the price to historic PE ratios as the world is changing so much. So, I will go on sentiment. Investors I follow have a DCF model of £8.
As I said, I could never dissect this company and perform a model to estimate what the company could be worth in the future. I would have huge respect for any investor who could. What I do know is the world is heading backwards instead of forward, as a child I thought we would achieve peace on earth by 2023 but obviously not.
I do suspect that soon BAE’s sales will rise significantly as countries take cover and with inflation set to decline this could help take the strain from declining operating profits.
As you can see from the chart below BAE is in a clear uptrend hitting all-time highs. I think a softening back to a weekly 50 Moving average could see me dip my toe in to ride the fear to even greater highs.
Anglo American
As swing traders, we can always benefit from down-trending stocks, and I noticed a head-and-shoulders pattern forming on Anglo-American.
Anglo-American states it is a leading global mining company and has products that are essential ingredients in almost every aspect of modern life. From diamonds to fertiliser the company is worth over 41b and is highly regarded by the market.
Nevertheless, the products AAL trades in seem out of favour at present with prices falling from the inflation uplift they felt in the last few years.
Platinum accounts for 30% of revenue and with all precious metals is currently down-trending.
Iron Ore contributes 23% benefits in strong economies by building programs using the metal for making steel but with the economic outlook as bleak as it is, will the demand wane? Again, it’s up to us how we view the economy, how bad will a recession be? Some signs from China are that the building could be starting again as the CCP tries to lift the economy and China is famous for demanding steel.
Steel Making Coal is way out of favour with companies focusing on other metals that are vital for lower carbon energy, completing a shift out of fossil fuels amid mounting criticism of the sector. Could dealing in this area hurt revenues and penalise the company going forward? Coal contributes 18% to revenue.
Copper With the world going electric from cars to datacentres copper is predicted to soar in the coming years but for now, the metal is off inflationary highs and trending down on a weekly chart.
The company has just taken a 1.7b write-down on a purchase of a Yorkshire mine in 2020. The potash mine was run by Sirius Minerals. I remember the company well and watched as the share price rose to extraordinary highs after someone pitch the business to me in a pub. I stayed away from the idea and later watch as its share price tumbled after a £400m bond issue failed, a crushing setback the firm blamed Brexit sending a chill through debt markets and a refusal by the government to offer loan guarantees. The company was bought by Anglo American. The moral of the story is don’t buy ideas pitched by friends who don’t know anything about the stock market and don’t fall for FOMO.
I will be looking for a way into a short on a smaller timeframe with a target of the support around 2500p. if the share price breaks down to this level, a head and shoulders pattern is confirmed and a stage 4 downtrend could be confirmed.
Howdens Reports FY22
Period end – 25th December 2022
Market Cap £3.99b
Price – 717.4p
I like Howdens. I redevelop properties and I constantly work and converse with joiners. Howden’s seems to be highly regarded in the industry.
Following this business gives a good guide on how the property market is doing overall and things seem to be doing quite well.
2023 plans to gain market share are on track with the acquisition of Sheridans Solid Work Surfaces contributing to this. The business is expanding ranges currently underrepresented such as high-value kitchens.
The rollout of new stores is going well with the expansion into the Republic of Ireland and France.
The company sounds upbeat going forward. The company states, “The fundamentals are robust and strong” and “Howdens is in good shape”.
Revenue came in 10.8% higher than in 2021 at £2319m. 2021 was an abnormal year for the market as the economy went crazy with customers spending stimulus on kitchens, so it’s good that Howden compares trading to more normal times of 2019, when revenue in 2022 came in 46.4% higher.
Pricing has been raised and passed successfully which shows pricing power.
The company is debt free with £308 in cash and a £150m banking facility and unaffected by the possible risk scenarios outlined by management.
Inventory has risen by £70m to £373.3m inventory as specific mitigation against supply chain disruption in the future.
Estimate EPS seems to have been 55p-56p but has beat today coming in at 65.6p. Excellent.
You would have thought following the media, Howden’s would have firmly confirmed a slowdown in the property sector but nothing of the sort has been reported today. This is a well-run, highly regarded business moving forward, H2 profits were higher than H1 which could show confidence in the economy is improving.
The company likes to trade in the 15-16 PE range historically, but I am mindful of the fact that the 10y risk-free rate and interest rates have risen in the past year changing what investors typically wanted to receive as compensation from Howdens. FY23 estimated EPS was due to decrease by 12.5% to 48p from 54p, with EPS coming in today at 65p should we still set a decrease of 12.5% to 56.8p. How bad will the economic turndown be, if any? The sentiment seems to change daily. As Howden’s is in an uptrend, I will look for a clear indicator to get in or wait for a pullback.
A well-run, debt-free company with increasing profits ticks my boxes, I think a target of 770-780 could be achieved in current market conditions. Not the best reward but good enough for the watchlist.
This is an overly complicated business with too many moving parts that I don’t understand, but as a swing trader, this is not a problem.
What I do know is BAE is, amongst other things, a defence company supplying air, sea, land, and intelligence systems to many countries around the world that are currently increasing their defence budgets in the wake of a possible new cold war, or continuation if that’s how you see things.
The company has seen an increase in revenue and record orders, but operating profit is flat today affecting bottom lines with an estimated EPS of 54p missed coming in at 50p, I suspect this is due to high inflation. BAE informs us that countries are indeed increasing defence budgets and hopefully most of the work will be going in their direction.
The US is BAE’s Largest customer contributing 43% to revenue followed by the UK, Europe, Saudi, Qatar, and the rest of the western world.
BAE doesn’t only trade in defence it also works with commercial companies such as airlines and informs us today of the growing flying hours performed by the aviation industry which could have a read across to the airline stocks.
The company has £2b of debt compared to cash of £3.1b and a pension benefit that has just moved into surplus.
The company has raised its dividend with the full year coming in at 27p per share.
I find it difficult to compare the price to historic PE ratios as the world is changing so much. So, I will go on sentiment and fear.
Other investors I follow have a DCF model of £8.
As I said, I could never dissect this company and perform a model to estimate what the company could be worth in the future. I would have huge respect for any investor who could. What I do know is the world is heading backwards instead of forward, as a child I thought we would achieve peace on earth by 2023 but obviously not.
I do suspect that soon BAE’s sales will rise significantly as countries take cover and with inflation set to decline this could help take the strain from declining operating profits.
As you can see from the chart below BAE is in a clear uptrend hitting all-time highs. I think a softening back to a weekly 50 Moving average could see me dip my toe in to ride the fear to even greater highs.
Anglo American
As swing traders, we can always benefit from down-trending stocks, and I noticed a head-and-shoulders pattern forming on Anglo-American.
Anglo-American states it is a leading global mining company and has products that are essential ingredients in almost every aspect of modern life. From diamonds to fertiliser the company is worth over 41b and is highly regarded by the market.
Nevertheless, the products AAL trades in seem out of favour at present with prices falling from the inflation uplift they felt in the last few years.
Platinum accounts for 30% of revenue and with all precious metals is currently down-trending.
Iron Ore contributes 23% benefits in strong economies by building programs using the metal for making steel but with the economic outlook as bleak as it is, will the demand wane? Again, it’s up to us how we view the economy, how bad will a recession be? Some signs from China are that the building could be starting again as the CCP tries to lift the economy and China is famous for demanding steel.
Steel Making Coal is way out of favour with companies focusing on other metals that are vital for lower carbon energy, completing a shift out of fossil fuels amid mounting criticism of the sector. Could dealing in this area hurt revenues and penalise the company going forward? Coal contributes 18% to revenue.
Copper With the world going electric from cars to datacentres copper is predicted to soar in the coming years but for now, the metal is off inflationary highs and trending down on a weekly chart.
The company has just taken a £1.7b write-down on a purchase of a Yorkshire mine in 2020. The potash mine was run by Sirius Minerals. I remember the company well and watched as the share price rose to extraordinary highs after someone pitched the business to me in a pub. I stayed away from the idea and later watched as its share price tumbled after a £400m bond issue failed, a crushing setback the firm blamed Brexit sending a chill through debt markets and a refusal by the government to offer loan guarantees. The company was bought by Anglo American for what seems an inflated price. The moral of the story is don’t buy ideas pitched by friends who don’t know anything about the stock market and don’t fall for FOMO.
I will be looking for a way into a short on a smaller timeframe with a target of the support around 2500p. if the share price breaks down to passed level, a head and shoulders pattern will be confirmed and a stage 4 downtrend could be also confirmed.
