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(TPK) Travis Perkins plc Share Chat

Discussion in 'General Share Chat' started by Jon Holden, May 14, 2015.

  1. Greets

    Greets Small time investor

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  2. Jon Holden

    Jon Holden Demi God of BlueShare

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    It's working
     
  3. Greets

    Greets Small time investor

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    This information might be of use to anybody who is considering investing in the construction sector and indicates why I'm invested in Travis Perkins.

    The construction market is currently very buoyant but investing in a construction businesses can be a bit of a challenge as no matter how good the business its prospects can change very quickly, for example:


    • Reputation - Barratt a very good company lost considerable sp value due to quality issues exposed on national TV. You only need one issue that could happen despite your best efforts and the business is history. Imagine what would happen if Willmot Dixon made an error resulting in a boiler malfunction and 20 people died from carbon monoxide poisoning.
    • Nature of business - Construction businesses normally consist of a large group of projects and these tend to be treated in reality as 'individual' businesses. You only need to have a few rogue projects for it to impact the whole business. I mention this as my role is to go to problem projects to asses what's gone wrong and to ensure any losses are mitigated. Time and time again the problems have been hidden from management and by the time I turn up we can already by looking at £10m + losses.
    • Accidents - Have a death or serious incident resulting in a health and safety prosecution and you can be precluded from tendering for new work.
    • Supply chain insolvency - have a major supplier go bust and it could overnight wipe out businesses profits
    • Bidding - make one mistake and you could be looking at huge losses on a project for years to come.
    • Boom and bust cycle - One minute you have government spending billions on schools and hospitals and the next minute nothing.
    • Etc, etc.
    I mention this as no matter how good a construction business is they are all susceptible to the above. Recent example would be Balfour Beaty and a past example Laing who sold business for a £1.

    I therefore invest in suppliers to the construction industry. This is why I'm invested in Travis Perkins (builders merchants).


    • Construction business is booming.
    • Being in the industry, hopefully I will time my exit at the right time.
    • TP now have some national agreements with contractors. This is boosting turnover. TP can give contractors bigger discounts due to volume than the discounts they can give to the contractors supply chain.
    • Some of TP national agreements are for years giving them predictability of turnover.
    • Innovative quality company.
     
    Jon Holden and TupacAmaru like this.
  4. Jon Holden

    Jon Holden Demi God of BlueShare

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    Thanks @Greets a set of @coolebenji charts would be very helpful. I can see the logic in what you say, I have a few builders on the assumption that a rising housing market makes them a good investment but the supply chain looks more stable in the long term. What are dividends like as I'm trying to be a value investor.
    Thanks in anticipation as your insight is always valued.
     
  5. Greets

    Greets Small time investor

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    38.00p 2014 and 31.00p previous year.
     
  6. Jon Holden

    Jon Holden Demi God of BlueShare

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    @Greets been doing my own research and I see what you mean, steady growth in sp and reliable growing div, good div cover. One for my ISA I think. Will keep a weather eye on it and have set up alerts on Morningstar hoping for a back off to the sp giving me a buying opportunity.
    Time to shuffle some funds so I can make a meaningful investment.
    Grateful for the heads up and your insight as always.
     
  7. coolebenji

    coolebenji ..in the Real World we compete with the Best...

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    [​IMG]

    Breaking this high suggest this stock can now power higher, pullback to support or towards the support can happen to test support so any stops under this line would be a wise decision.. Breaking this high also indicates an ABCD pattern is possible indicating at run up to 2800 on the next leg up is possible..
    [​IMG]
    Looking at the daily the next entry point for this share is breaking the blue line with volume as confirmation... GL
     
  8. coolebenji

    coolebenji ..in the Real World we compete with the Best...

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    [​IMG]

    ABCD pattern too big for chart notice.. notice time frame..
     
  9. Jon Holden

    Jon Holden Demi God of BlueShare

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    @coolebenji thanks for the charts they make very interesting reading, it confirms what the historic charts tell me, that a steady rise will continue unless marketplace changes directly impact the business, which I believe is unlikely though not impossible. Even if there is another downturn in the housing market TP will weather the storm as the have before.

    Based on my and @Greets previous comments this looks like a good long term share with a reasonable dividend attached.
     
  10. TwitterPost

    TwitterPost A Legendary Member

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  11. bentley15

    bentley15 Demi God of BlueShare

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    Invested in WHAT ??
     

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