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northern rock share prices

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geordielass
geordielass Posts: 770 Forumite
Part of the Furniture Combo Breaker
in Savings & investments
Can anyone tell me why Northern Rock shares are rocketing at the moment and if it is a good idea to sell now or hang on and see what happens.Thanks.
He who smiles rather than rages is always
the stronger

Comments

  • ReportInvestor
    ReportInvestor Posts: 3,646 Forumite
    They are a very efficient, streamlined operation - a "mortgage machine" - that has successfully expanded market share and profits (the Mail on Sunday fingered them as the mortgage lender with the highest fixed charges).

    Their cost/income ratio is the lowest in the business and the numbers keep coming in - transforming them from a regional building society into one of the top UK players with 8% market share in a field where future industry consolidation remains likely. The management keeps coming up with the goods, hence the gradual rerating.

    They will have been helped by the impression over the last few months that the housing market has stabilised & that a soft landing or even some growth may happen. I see that Bradford & Bingley (which is a play on the buy-to-let market) also hit a high yesterday.

    One slight worry is if they have been lending too much money to first time buyers through their 125% 6X salary "Together" mortgage.

    Basically the management looks pretty good, so they are a play on the housing market and the economy.

    Clikck here to read more about the rise and rise of the Rock :)

    Were you lucky enough to get the shares when it demutualised?

    If so you have a sizeable shareholding of nearly £5,500 and if you are concerned, you could always sell half and run the rest. That is the trouble with successful shares, although we are usually told to "run with the winners" that can create some imbalance in our overall investments.

    I did notice some broker advice to buy when they were in the 950-970p range, before this latest £1 rise.
  • geordielass
    geordielass Posts: 770 Forumite
    Part of the Furniture Combo Breaker
    Hi,thanks for the info,yes we got them when it demutualised and decided to hang on to them (how happy am I now). Now its decisions decisions may take your advise and sell half, I never thought of that.Thanks again.
    He who smiles rather than rages is always
    the stronger
  • geordielass
    geordielass Posts: 770 Forumite
    Part of the Furniture Combo Breaker
    Me again, just had a thought, it may be a good idea to hang on to them in case there's a takeover. Can you advise the best place to go to sell them.The last time I done this I just went to my bank.Cheers.
    He who smiles rather than rages is always
    the stronger
  • ReportInvestor
    ReportInvestor Posts: 3,646 Forumite
    A takeover was thought possible in the early days, but less so now.

    But they are now the mortgage machine "par excellence" (I know that's not how you say it in the NE ;)) and they are a formidable force in their own right.

    The impressive thing is that they have done so well while still giving 5% of all profits to local NE charities :T . In the early days this was thought to be too much of a handicap for them to progress, and/or a millstone around their neck if they wanted to attract a takeover. The City's phrase is that is was a "poison pill" to prospective bidders.

    But Adam Applegarth, CEO, has proved the doubters wrong big time :).

    If you want to sell all or part (if it was me I'd keep at least some) I would recommend

    Squaregain - Click on the link

    at just £12.50 per sale (regardless of value :)) compared to the 1.5% of £5.5K that you might encouter if you visit your local bank :(.

    P.S. I'm delighted you hung onto the shares. Most locals sold up.
  • geordielass
    geordielass Posts: 770 Forumite
    Part of the Furniture Combo Breaker
    ReportInvestor, your advise is very much appreciated,you have been a great help.x
    He who smiles rather than rages is always
    the stronger
  • ReportInvestor
    ReportInvestor Posts: 3,646 Forumite
    A pleasure, gl :).

    Not advice, though (see the board rules). Just my opinion.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    For anyone who hasn't got much experience in trading shares or wants to switch certificate shares over to online (but not necessarily sell them ) may I suggest they take a look at Halifax Sharebuilder?

    This is a very low cost broker for people who want to build up a share portfolio.Selling is more expensive but still cheaper than most brokers.

    http://www.halifax.co.uk/sharedealing/sharebuilder.shtml
    Trying to keep it simple...;)
  • geordielass
    geordielass Posts: 770 Forumite
    Part of the Furniture Combo Breaker
    Oops sorry! Thankyou for your opinion, I like it.
    He who smiles rather than rages is always
    the stronger
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