The short term market consensus for Barratt Developments Plc
Updated
The short term market consensus for Barratt Developments Plc(BDEV) have change to Bullish
Barratt Developments Plc engages in the business of developing residential and non-residential properties mainly in the United Kingdom. It operates through the Housebuilding and Commercial Developments segments. The company was founded by Lawrence Arthur Barratt in 1958 and is headquartered in London, the United Kingdom.
Our Proprietary Trading System indicates the following:
The Long Term Trend (LTT) given by the Global Monthly TIME BAR (GMTB) is currently Bullish
The Medium Term Trend (MTT), given by the Global Weekly TIME BAR (GWTB) is currently Bullish
The Short Term Trend (STT), given by the Global Daily TIME BAR (GDTB) is currently Bullish
The Micro Trend (MT), given by the Global Four Hour TIME BAR (GFHTB) is currently Bullish
Global Fundamental Market Analysis Ratios
PRICE-TO-EARNINGS RATIO ANALYSIS
The first market ratio that I look at is the Price-to-earnings ratio or the P/E ratio.
This ratio enables me to gauge the relative value of a company.
It is measured by dividing the company’s stock price by its earnings per share:
Price-to-earnings ratio = stock price/earnings per share
The price of a company’s stock reflects or give me an idea of the company’s ability to generate profits. The P/E ratio reveals the price that I must pay to capture a dollar of earnings.
A company’s P/E ratio is measured relative to the industry average or its peer group. If the P/E ratio of a company exceeds the P/E ratio of the industry, it is usually determined that the company is overvalued. If the P/E ratio of the company is less than the industry average, it is observed that the company might be undervalued. And if the P/E ratio of the company is equal to the industry average, the company is probably at its fair value.
There are instances when the P/E ratio has fallen below the industry average for good reason and the company is not considered undervalued.
Let us assume that a company has a market price per share of $50. If this company has earnings per share of $5, its price-to-earnings ratio is $50/$5 = 10. If the industry average is 18, then the company is undervalued. Again, there could be reasons for this, but at first glance, it appears that the company is undervalued. Now let assume that the industry average is 6, the company might be overvalued
Let us now look at a practical application of this very important ratio.
We'll look at Barratt Developments PLC's (LON: BDEV) P/E ratio and reflect on what it tells us about the company's share price.
• Basic EPS (FY) = £0.7324
• Current Stock Price = £7.46
Price-to-earnings ratio = stock price/earnings per share
Price-to-earnings ratio = £7.46/£0.7324= 10.186
Based on the calculation above, Barratt Developments’s P/E ratio is approximately: 10.20. That means that at current prices, I am paying £10.20 for every £1 in trailing yearly profits.
Barratt Developments's P/E is 10.2 which is below average (17.9) in the GB market. This means at a glance it is undervalued
Further analysis of the financial statements reveals the following:
• BDEV's debt to equity ratio (4.1%) is considered satisfactory
• BDEV's debt to equity ratio has reduced from 6.6% to 4.1% over the past 5 years
• BDEV's debt is well covered by operating cash flow (180.7%).
• BDEV's debt is well covered by operating cash flow (180.7%).
In light of the above trend analysis we will execute a bullish trade on Barratt Developments Plc(BDEV)
Trade #1:Executed from GATS#4
Global Entry Signal For Trade #1: Buy @ £7.445
Global Trailing Stop Loss Trade #1: @ £6.745
Global Target Profit Trade #1 : @ £14.445
Trade #2: Executed from GATS#5
This trade is activated when Trade #1 from GATS#4 reaches a Secured Unrealized Profit (SUP) of 8DATR ((Break Even Point (BEP) + 4DATR)).
That is when the trade has realized 8DATR in our favor
Global Trade Management Strategy: We applied the Global Trailing Stop System for Global Trading Strategy #4. View Updates
Trading is risky
There is a substantial risk of loss in futures and Forex trading. Online trading of stocks and options is extremely risky. Assume you will lose money. Don't trade with money you cannot afford to lose.
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security.
To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice.
To the extent that it includes references to specific securities, commodities , currencies, or other instruments, those references do not constitute a recommendation by Global Financial Engineering,Inc. to buy, sell or hold such investments.
This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers.
Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Barratt Developments Plc engages in the business of developing residential and non-residential properties mainly in the United Kingdom. It operates through the Housebuilding and Commercial Developments segments. The company was founded by Lawrence Arthur Barratt in 1958 and is headquartered in London, the United Kingdom.
Our Proprietary Trading System indicates the following:
The Long Term Trend (LTT) given by the Global Monthly TIME BAR (GMTB) is currently Bullish
The Medium Term Trend (MTT), given by the Global Weekly TIME BAR (GWTB) is currently Bullish
The Short Term Trend (STT), given by the Global Daily TIME BAR (GDTB) is currently Bullish
The Micro Trend (MT), given by the Global Four Hour TIME BAR (GFHTB) is currently Bullish
Global Fundamental Market Analysis Ratios
PRICE-TO-EARNINGS RATIO ANALYSIS
The first market ratio that I look at is the Price-to-earnings ratio or the P/E ratio.
This ratio enables me to gauge the relative value of a company.
It is measured by dividing the company’s stock price by its earnings per share:
Price-to-earnings ratio = stock price/earnings per share
The price of a company’s stock reflects or give me an idea of the company’s ability to generate profits. The P/E ratio reveals the price that I must pay to capture a dollar of earnings.
A company’s P/E ratio is measured relative to the industry average or its peer group. If the P/E ratio of a company exceeds the P/E ratio of the industry, it is usually determined that the company is overvalued. If the P/E ratio of the company is less than the industry average, it is observed that the company might be undervalued. And if the P/E ratio of the company is equal to the industry average, the company is probably at its fair value.
There are instances when the P/E ratio has fallen below the industry average for good reason and the company is not considered undervalued.
Let us assume that a company has a market price per share of $50. If this company has earnings per share of $5, its price-to-earnings ratio is $50/$5 = 10. If the industry average is 18, then the company is undervalued. Again, there could be reasons for this, but at first glance, it appears that the company is undervalued. Now let assume that the industry average is 6, the company might be overvalued
Let us now look at a practical application of this very important ratio.
We'll look at Barratt Developments PLC's (LON: BDEV) P/E ratio and reflect on what it tells us about the company's share price.
• Basic EPS (FY) = £0.7324
• Current Stock Price = £7.46
Price-to-earnings ratio = stock price/earnings per share
Price-to-earnings ratio = £7.46/£0.7324= 10.186
Based on the calculation above, Barratt Developments’s P/E ratio is approximately: 10.20. That means that at current prices, I am paying £10.20 for every £1 in trailing yearly profits.
Barratt Developments's P/E is 10.2 which is below average (17.9) in the GB market. This means at a glance it is undervalued
Further analysis of the financial statements reveals the following:
• BDEV's debt to equity ratio (4.1%) is considered satisfactory
• BDEV's debt to equity ratio has reduced from 6.6% to 4.1% over the past 5 years
• BDEV's debt is well covered by operating cash flow (180.7%).
• BDEV's debt is well covered by operating cash flow (180.7%).
In light of the above trend analysis we will execute a bullish trade on Barratt Developments Plc(BDEV)
Trade #1:Executed from GATS#4
Global Entry Signal For Trade #1: Buy @ £7.445
Global Trailing Stop Loss Trade #1: @ £6.745
Global Target Profit Trade #1 : @ £14.445
Trade #2: Executed from GATS#5
This trade is activated when Trade #1 from GATS#4 reaches a Secured Unrealized Profit (SUP) of 8DATR ((Break Even Point (BEP) + 4DATR)).
That is when the trade has realized 8DATR in our favor
Global Trade Management Strategy: We applied the Global Trailing Stop System for Global Trading Strategy #4. View Updates
Trading is risky
There is a substantial risk of loss in futures and Forex trading. Online trading of stocks and options is extremely risky. Assume you will lose money. Don't trade with money you cannot afford to lose.
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security.
To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice.
To the extent that it includes references to specific securities, commodities , currencies, or other instruments, those references do not constitute a recommendation by Global Financial Engineering,Inc. to buy, sell or hold such investments.
This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers.
Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Note
Update #1: We will adjust our Global Trailing Stop Loss Trade #1:Executed from GATS#4
Global Entry Signal For Trade #1: Buy @ £7.445
Adjusted Global Trailing Stop Loss Trade #1: @ 7.392
Global Target Profit Trade #1 : @ £14.445
Note
Defense contractor BAE Systems was the best-performing U.K. large-cap company on Monday after announcing plans to buy two different companies that need to be divested for the merger between Raytheon and United Technologies to complete.Read more at finance.yahoo.com/m/1f636293-f9ae-30f3-baa4-d4c28b5743e3/bae-systems-rallies-after.html
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