Shares digital

Barratt Devs. (BDEV) 423.25p

The house builder said it traded ‘satisfactorily’ in H1. Prices held up and costs reduced. (Read the full story: www.sharesmagazine.com/node/2959)

Shares says: The recent interest rate cut may not be enough to reignite property transactions. Consumers are going to be worried by the weak stock markets and global recession fears. But the widespread slump in house builder shares has triggered investor interest seeking bargain stocks. Shareholders should hang on in the hope that this interest will trigger a share price revival. HOLD

The Independent says: The housing market has gone into deep freeze, decimating shares of leading builders. But perhaps a thaw is under way. Barratt traded satisfactorily in the six months to December, with selling prices holding up. The market is taking its mid-winter breather and the crunch will come in the spring, when buyers should be stomping all over Barratt sites and slapping deposits on new homes. But that will require a big improvement in sentiment helped by cuts in interest rates. Brokers believe profits for 2009 will slip from £430 million to £375 million, putting the shares on five times expected earnings. That is cheap but buyers would be wiser to hold off until the spring, when clearer evidence emerges of housing sales. HOLD

The Times says: Barratt shares jumped 10% to 399p as investors bought in on the idea that its shares – down 75% since its £2.2billion purchase last spring of Wilson Bowden – may be bottoming out. Buyers may be enticed by a stock that, judging by promises on future dividend cover, will yield 9%, but will have to hold on through volatile times for medium-term gains.