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Shares in Taylor Wimpey (LON:TW) have achieved a new ‘pandemic high’, as we like to call it here, and are currently trading at close to their recent 52 week high at 182.75p at time of writing.

Bullishness around Taylor Wimpey stock has been picking up sharply since early November, when the shares were priced at close to the 100p mark, but investor sentiment has been getting increasingly positive since then. Canaccord recently reiterated a buy for the stock with a target price of 193p.

Investors are getting back into leading house builders

Latest data from AI and machine learning specialist Irithmics, shared with The Armchair Trader this week, confirms our suspicion that investors are getting back into house building and stocks. There may still be scepticism around the prospects for the commercial property sector in the UK, but when it comes to residential, large investors like fund managers are feeling more positive about Taylor Wimpey, according to Irithmics.

The UK house building sector was supported by the recent UK budget, which extended the stamp duty holiday to 30 June and the nil rate band to £250,000 to the end of September. In addition government mortgage guarantees on 95% of loans are also back.

Investors are more bullish on Taylor Wimpey on the long term picture, slightly less so on the short term, but overall sentiment is very positive.

Appetite for the stock is not as strong as for some other FTSE leaders, like BP and Rolls Royce, and investors seem more likely to pick up Taylor Wimpey stock for the longer term than a short term punt. There still remains a degree of caution around UK house building, we think almost entirely driven by the vaccine and a lack of clarity on what the UK economy is going to do over the next six months.

A date for your diary

On the 21st of October, Stuart Fieldhouse will be joining Sarah Lowther and Mark Watson-Mitchell to discuss which small cap investments they like the look of and, perhaps, which ones they do not. It promises to be a lively and insightful discussion. If you are interested in investing in small cap stocks then this could be a profitable use of your time. We hope you can make it! Sign up now

Taylor Wimpey share price boosted by UK budget this month

Taylor Wimpey has resumed payment of dividends, which will attract many investors back into the shares. The company said it would pay out roughly 7.5% of net assets, at least £250m per year, with a proposed final dividend in the area of £151m. This equates to a 4.4p per share pay out.

The share price was boosted back in November when Taylor Wimpey said it was expecting to post a full year profit at the upper end of expectations.

“One could argue the property market could run out of steam when the stamp duty holiday does come to an end, but overall business optimism is on the rise thanks to the UK’s relatively successful vaccine distribution scheme,” said David Madden, an analyst with CMC Markets. “If all goes according to plan, the country should be operating without restrictions in late June, which should spur economic activity. Taylor Wimpey is bullish in its outlook, announcing in November that it had agreed to acquire £826m worth of land, significantly higher than its typical acquisition rate, which sends out a strong message.”

The UK construction sector does seem to be well on the way to recovery. House builders across the board are talking about strong order books. Institutional; investors are expecting further positive news flow from Taylor Wimpey.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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A date for your diary

On the 21st of October, Stuart Fieldhouse will be joining Sarah Lowther and Mark Watson-Mitchell to discuss which small cap investments they like the look of and, perhaps, which ones they do not. It promises to be a lively and insightful discussion. If you are interested in investing in small cap stocks then this could be a profitable use of your time. We hope you can make it! Sign up now

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