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Lowly-rated Redrow deserves more credit

The mid-cap housebuilder has been boosted by the stamp duty break and Help-to-Buy scheme, which have aided its pandemic recovery
Lowly-rated Redrow deserves more credit
  • Shares trade at a discount to the wider sector
  • The stamp duty break and pent-up demand have led to a bounceback in completion levels
  • Strong demand has resulted in a net cash position and the reinstatement of dividends
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
  • Shares trade at discount to sector
  • Net cash balance
  • Dividends reinstated
  • Earnings in recovery
Bear points
  • Stamp duty break uncertainty
  • Investment needed to rebuild outlet numbers

The blistering surge in housing market activity is a reality few would have predicted as the pandemic took hold in March last year. Yet a sharp rise in demand and supressed supply translated into the highest rate of sales price growth since August 2007, according to the Office for National Statistics. 

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