Market may be politely saying that the earnings outlook is optimistic, and that the result will be lower than expected earnings. Analysts have already predicted a 13% drop of earnings per share for 2023.
The valuation indicates that the economic downturn and housing collapse have been at least partially offset with a 24 percent drop in stocks since early august. Even though the stock is trading at a discount to its net asset value of 447 pence a share, it is still trading well.
The BoE might be right about bad times coming and the severity of the pain. Like many other countries, the British economy became dependent on cheap money and cheap energy. All three have become more costly and will continue to do so. This has unintended consequences for the ability of households to save money and consume, as well as the profits and margins of corporations.
However, even if Britain is hit with a huge housing market crash and a surge in mortgage defaults, OSB has the financial strength to weather it. If such a combination occurs, it is unlikely either will be. The MPC and the government will not do anything.
OSB seems to offer a good mixture of yield and contrast value. Catch.
Questor: Hold
Tape: OSB
The share price at closing was 436.4p
Ross Mold is an investment director for stockbroker AJ Bell
Questor’s most recent column is available at telegraph.co.ukEvery Sunday, Tuesdays and Wednesdays from 6 a.m.
Questor’s article investment rulesBefore you follow our advice.
Source link
[Denial of responsibility! wideworldmag.co.uk is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – at wideworldmag.co.uk The content will be deleted within 24 hours.]
