Broker snap: Killik starts Bovis as a 'buy'

11th Dec 2009 11:43

Bovis Homes bounced off a five-month low Friday as investors piled back into housebuilders and Killik Capital initiated coverage with a 'buy' rating.The long-term fundamentals of the UK housing market remain positive, and any concern over the outlook for house prices in 2010 is more than compensated for by the firm's current valuation, said the broker.Bovis shares trade on a discount of 28.7% to the last reported tangible net asset value (NAV), and Killik thinks NAV is likely to increase through retained earnings and if, as expected, writedowns are reversed with the final results in March."Following a period of cash conservation, Bovis has a strong balance sheet, leaving it better placed than many to take advantage of attractive land acquisitions," it says.