Woodford doubles down on housebuilder

Woodford doubles down on housebuilder

Neil Woodford has doubled down on his investment in UK mid cap housebuilder Crest Nicholson and is now the largest shareholder in the business.

Woodford Investment Management confirmed it increased its shareholding from 5.21 per cent to 10.34 per cent on 12 February.

At the end of January Crest Nicholson reported a 6 per cent rise in profits for the 12 months to October 31. In its statement accompanying the results, the company said the housing market remains robust.

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Mr Woodford made a swathe of investments in the housebuilding sector over the past year, and is also invested in Taylor Wimpey and Barratt Developments.

This is part of Mr Woodford’s long-term view that the UK economy will do better than had been expected.  

Crest Nicholson shares have been poor performer over the 12 months to 13 February, having dropped nearly 10 per cent from £5.38 to £4.82.

Meanwhile Taylor Wimpey and Barratt Developments have both seen their share prices rise by more than 10 per cent over the past year.

Mr Woodford's flagship Woodford Equity Income fund shed roughly £1bn of assets since the start of 2018 because of a combination of weak investment sentiment toward the fund manager and the recent downturn in markets.

The fund, which is now £7.2bn in size, has lost 8.75 per cent over the past 12 months after a series of holdings saw their share prices fall, including Capita, Provident Financial and AstraZeneca.

Mr Woodford has taken a profoundly contrarian view on the UK market, shunning stocks he believes are exposed to the uptick in global economic growth, such as miners, and investing in companies, such as banks, that he believes will perform well as the negative sentiment towards the UK economy shifts and becomes more positive.