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Deep Value Investing: Finding bargain shares with big potential by Jeroen Bos

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CHAPTER 13. BARRATT DEVELOPMENTS

Bought at: 90p (November 2011)

Still holding at: 330p (June 2013)

SOMETIMES A WHOLE sector can become a value investor’s paradise. Virtually every component stock starts showing deep value characteristics. The house-building industry is a good example of this. The industry is very cyclical and this creates lots of opportunities for value investors. However, when the sector is in crisis, risk is also at its highest – and it is still very possible to get caught out. One needs to be cautious, even when a share seems to be the bargain of the century.

Our investment in Barratt Developments took a long time in coming as we wanted to be certain of the company’s value before committing ourselves.

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