Redrow PLC

Redrow Housing
Photo courtesy of Redrow PLC

Redrow plc focuses on housebuilding activities in the United Kingdom. The company acquires land; and develops and sells residential housing properties. Redrow plc was founded in 1974 and is based in Flintshire in the United Kingdom.

The daily price chart of RDW.L is shown below using my normal layout showing data over the past year.

VectorVest chart of Redrow PLC
Click or tap image to enlarge.

The green line study above the price shows the VectorVest valuation of the company which has recently (July 2021) been revalued to a level significantly higher than the current share price.

In the window just below the price, the blue study shows that forecast Earnings per share (EPS) is rising and this is the engine that’s been driving the share price upwards. Over the past six months, forecast EPS has risen from approximately 60p to 80p and it is this ramp upwards in EPS that’s caused the valuation to rise.

On VectorVest, the Relative Safety (known as RS) of the earnings stream is ranked as excellent. The share pays a generous dividend of over 3% which is well covered by an earnings yield of more than double that amount. The company has an excellent history of paying and growing the dividend yield.

The metric measuring long-term share price appreciation potential in relation to a AAA rated corporate bond (known as RV) is showing an excellent value. RDW.L has a forecast Earnings Growth Rate (GRT) of 15% which VectorVest considers to be very good.

Technically, RDW.L is trending strongly as measured by the proprietary VectorVest Comfort Index. The Comfort Index is an indicator which reflects a stocks ability to resist severe and or lengthy price declines. The Comfort Index is unique in investment research and a secret weapon.

Since May 2021, RDW.L has charted a “cup and handle” formation which is a bullish formation. A share price daily close above 720p would confirm an entry signal from this pattern.

In summary, RDW.L looks set to grow earnings strongly and safely over the next year plus deliver and grow its dividend yield. The share is markedly undervalued and technically is on a Buy recommendation on VectorVest.

At present, the advice on VectorVest as I write on the morning of the 23rd of September is to exercise caution in buying stocks as the overall London market recovers from a two-week pullback. The underlying or long-term trend of the overall market is bullish. This analysis is supplied to VectorVest subscribers each day in an easy-to-use format as shown below.

VectorVest ColorGuard is Neutral
Click or tap image to isolate.

Traders should carefully stalk the share and wait for VectorVest Market Timing Gauge to indicate that’s it’s safe to buy stocks.

Once more doing nothing is much more difficult than it would seem, I know.


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