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You Might Want to Follow Some Big Investors into the Bouncy Builder that is Countryside

By Malcolm Stacey | Friday 30 June 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Hello Share Tracers. In light of signals that the government may soon relax the purse strings, influenced by public demand, let’s take another look at Countryside Properties (CSP).

The Tories, together with most of the opposition, have said they want to encourage the building of more affordable homes. And Countryside seems ripe for Whitehall help. It specialises in homes in the outer layers of London, and the South East where house prices are high and demand for cheaper homes is strongest. It also builds in the North West.

MP’s must love this company. Part of its policy is to refurbish public land, including scruffy plots, turning it into housing estates. It often works in partnership with local councils and housing associations, both of which are being supported by central government in the building of affordable homes.

A sign that this company is worth looking into is that it's supported by so many institutional investors. One of the most enthusiastic of which is the insurance giant Aviva (AV.), with 8% of the shares. OK, these big investors often get it wrong, but with so many taking a stake in this company the chances of a major misjudgment must be fairly low.

Earnings per share are on a steady rise, putting on 50% in the last 12 months. Yes, the share price has been forging ahead this year, but in my modest opinion, it still has further to go.

This ain’t a small builder. The market cap is £1.5 billion. And big firms are usually safer, though not always, than tiddlers. Now, I know the housing market is struggling at the moment, as the real value of wages fall and Brexit is putting off foreign buyers. But the government push to build more homes, together with a demand far outrunning supply should make energetic builders like this one fairly bomb-proof.

Much like the Punter’s Return.

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