Long story short: Through no fault of my own, I ended up with a paltry number of UK stocks that went from one place to another until they finally landed in my Fidelity account. Five years ago, they were worth over $9/share. Now they’re under $2.50/share. A chart shows that they’ve been crawling slowly upward since the middle of 2012 (when they were essentially worthless).
The stocks are for the parent company of Argos and Homebase. So how is the home improvement business in the UK? Picking up? (I hope!) Is the overall economy becoming friendlier to construction?
Because I’d really like to [del]dump[/del] sell these, but I don’t want to lose too much money. (Oh, apparently my shares were bought well before they reached their high value; so they don’t even have to double.)
The boom has sort of been - over the past few years, people worried about the recession and the housing market have put money into their own homes rather than selling/buying.
And (sadly for you) I don’t think of Homebase as a strong player in the DIY market (AFAICT, that would be B&Q). Just my impression, of course. Argos seems to be doing OK as the furniture market shakes out, but growth in internet shopping and the strength of Ikea is putting pressure on some elements of that.
My opinion (as a non-stockmarket follower) - hang on for the long haul, it will be a while before they come to parity with your purchase price.
It’s not doing badly in some ways, since people can’t afford to pay others to do their work, but Homebase doesn’t seem to be doing great business - being edged out by other businesses that do the same for less money more conveniently. Argos are doing very well (relative to the economy) though.
If the current slight upturn proves to be more robust than the politicians would have us believe then some folk may well start carrying out home investment work (and this is in a run up to the electioneering that will happen toward the middle 2015)
Homebase is part of the Sainsbury group and both have been struggling following a period when they were trendy and doing well.
You should be aware of which market segments it tends to sell into. Homebase is part of the aspirational home market, which is in keeping with Sainsbury itself. The middle income groups has been hit very hard in the recent recession. This is because the natural customers tend to be mortgaged up to the hilt homeowners in the middle layer of real estate ownership. Their problem is that in order to move onwards and upwards, they need buyers from lower down the housing market and this is where job insecurity and pay stagnation have hit most of all - so there are few homebuyers coming into this part of the market.
Its these new upcoming house buyers who would be moving in and going to Homebase.
Homebase, at least in the North of the UK, tends to be in the outer city housing layer, rather than the middle layer.
My own opinion is that Sainsbury itself needs to do something to attract customers, and that includes the Homebase subsidiary - I would not be surprised to see something soon, you might be as well to see if there is any action on CEO or strategic operations.
It is true that the lower reaches of the housing market have seen some small improvement, and if this continues then Homebase will improve.
The Homebase customer is generally seen as the natural supporter of the current government and you can bet that in the election run up,(which by the way starts at least 18 months before campaigning proper) this government will try to enthuse and that generally means finding ways to support real estate.
I’d say things will look up slowly but steadily for the next year, but if the current slight growth in the economy is not maintained, then confidence in the government will be weakened and your typical homebase customer is simply not going to commit to significant purchases.
Well, I didn’t even know I had these stocks for several years. I signed up to get my employer’s stock (and my investment has increased 190% over the past dozen years – not that I have many shares, and I’d forgotten I had any), and they were part of a group that was sold a few times. The cheap stock is apparently part of the fallout. So whatever happens, I’m not losing much.
Interesting. I see Homebase and Argos as being part of Home Retail Group PLC.
Those Home Retail Group (HMRLF) stocks show $4.31/share. When I look at their website (http://www.homeretailgroup.com) it says they are currently trading for £163.80 ($256.99). When I google ‘home retail group’, it says the trading symbol is OTCQX:HMRTY and the share price is $9.95, and Wikipedia says the symbol is LSE:HOME. I’m confused.
Yes, I’m afraid that your understanding of the Britsih retail market is better than that of some of the people who have posted in this thread. Homebase has not been part of Sainsbury’s for years. And for that matter Sainsbury’s has actually been doing rather well in recent years.
I think you’d be better off posting this to a UK share dealing forum, where people might know what they’re talking about.