Construction Industry

[Werner_1]

Guys, i would like to start a thread discussion the 2010 prospects of construction shares. Whats your thoughts on how this industry will fare now that the world cup infrustructure projects could be nearing its end? is the risks rising for a potential correction?

[#2]

My understanding of Construction stocks is that they are driven by their order books, with the majority of their profits being returned from overseas construction projects. With Dubai / Middle East slowing to a halt & our strong rand making it difficult to repatriate dollars into huge rand profits, I am not so sure that this segment isn't going to see a consolidation of sorts with a few of the larger players swallowing the smaller fish for their order books & turnover. I stay away from them as they don't send me cash very regularly & in sufficiently large enough amounts - LOL So look for small stocks trading on good PE's with solid order books. My bet is they will be swallowed up & you can make a few rand or getting good value when shares are swapped. OMO

[kwagga]

Have to agree with Bruberi on this one. Construction shares have already discounted slow growth into their share prices and you can clearly see that in contruction share history. This is a highly cyclical industry. The guys that made their money on these shares have left the building months ago. My attention this year will mainly be on fairly priced mid caps that underperformed their larger cap brothers.

[Werner_1]

Thanks guys, i have thought about my shares in WBO and would like to sell them to allocate cash elsewhere... i think i will do it...

[#5]

Ja WBHO seems to focus mainly on stadiums, road infrastructure, and airports and the stuff that danny jordaan raves about, the taps would probably gradually close after 2010. MUR on the other hand with their mining and petrochem construction (concor) and huge international exposure paints a different picture...

[barry_1]

Hello all,I don't hold but,would be especially cautious about selling this share ,at the present time as over a long period it has been a remarkable winner.It has gained over 2000 percent over the last ten years! No mistake on my part check the graph out!Now u might say former results are no reflection of what can happen in future....They have a marvellous history of increasing dividends and through out recessions never faltering along the way.The major thing is that they are cash flush and are well administered....At present they are LAGGARDS ,which i think that they will result in the share playing catch up during the following year ,probably towards the end of the year....Now as to conditions in the building industry; At present money lenders are all pessimists,but should move into positive mood as results start to pick up....construction in general has fallen behind real needs.

[_Marco_]

my honest view, all the bad news has been priced in, i personally bought myself small portions of esorfrankie, basilread and sanyati holdings, and will be looking @ a possible 5 year view.. as warren buffet says, be greedy when those are feareful.. lets see if it works

[_Marco_]

my honest view, all the bad news has been priced in, i personally bought myself small portions of esorfrankie, basilread and sanyati holdings, and will be looking @ a possible 5 year view.. as warren buffet says, be greedy when those are feareful.. lets see if it works

[#9]

But Werner is thinking of selling. Werner never sells.

[Werner_1]

lol. yip i never sell. I dont think there is anything wrong with WBO, just want to free some cash up for another investment, I am interested in increasing my investment in Research In Motion, I am very optomistic on the future growth of mobile devices and mobile internet... NASDAQ:RIMM in my view offers some good long term value on a solid, stable company. Also not many dividends paid, but share buybacks are strong and with no debt i like RIMM quite alot. only problem is it is based on Canada... but with TD Ameritrade its not that hard to acquire the shares.

[SKALA]

I also think that it could be good time to venture slowly back into construction; doom and gloom might be well priced in and the situation will turn. Bought BSR last week, since I think they will do well with their new expansions. This company has turned around smartly.

[louisg]

Perhaps PPC with it's high dividend yield should be considered. A kind of "picks and shovels" type of play on the construction industry.

[CHATTYCHAT]

Taking into account the turn this thread took I 'suppose you were looking for advice? Do you intend to keep this one alive? I am also interested in the opinions expressed regarding this sector, but find it difficult to keep up with opinions and info that arise as similar as stray cats. One bit from me: look at what the effect of a bad (government)customer had on Sea Kay's position as going concern...

[warhippo]

Buy and hold can be a smart strategy, but buy and ignore won't serve you in the long run. Without reviewing your holdings, you won't know if your portfolio remains balanced, and you won't shift your holdings to achieve retirement goals or help you cope with changing life events.