Selvaag Bolig (Sell, TP: NOK30.00) - Flippers are back
With expectations of interest rates having peaked, the flippers are back, with a catch-up effect in the Norwegian new-build market, helping Selvaag Bolig to sell 207 homes net in Q2, well above our forecast of 125. While 95 unit starts were lower than we expected, we estimate a catch-up effect in H2. However, profits remain trailing and we believe the valuation is too high, hence we find better risk/reward elsewhere. We reiterate our SELL, but have raised our target price to NOK30 (25).Selvaag Bolig ASA. Selvaag Bolig ASA, formerly Selvaag Bolig AS, is a Norway-based company engaged in the development of residential properties. The Company manages the entire process, from the purchase of land to the sale of finished homes. The Company operates through such subsidiaries, as Selvaag Bolig Modulbygg, which develops flats and terrace houses with the aid of modules; Meglerhuset Selvaag, which is an estate agency responsible for the sale of the Company's new homes, and Selvaag Pluss Service, which is engaged in the operation of the Company's Pluss Homes that offer security and services, such as cleaning and booking of tickets, among others. The Company's projects are located in Oslo, Stavanger and Bergen, Norway, as well as in Stockholm, Sweden, and include Lorenskog Stasjonby, Nyhavn Brygge, Lervig Brygge Pluss, Bjornasen Start and Utsikten-Mortensrudhoyden, among others. In the second quarter of 2013, the Company sold 200 homes.
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