Investors be wary of Fletcher Building: Hobson Wealth
Investment advisors Hobson Wealth says investors should remain very cautious about the prospects of Fletcher Building.
Fletcher Building announced this week that it was making provision for nearly a billion dollars of losses in its building and interiors division.
Mark Fowler, the head of portfolio strategy at Hobson Wealth, says he is not convinced that there won’t be more bad news in the future.
He told Newsroom that it appears Fletcher's share price is being held up by overseas investors who don’t fully understand the trouble the company has got itself into.
He says Fletcher's decision not to take on any major construction projects may impact margins in other divisions that supply materials.
Fowler also questioned the decision to concentrate on home building saying that this sector was very “late cycle”.
In this interview with Newsroom’s Mark Jennings he discusses Fletcher's funding issues and predicts that the share market will be more volatile this year.
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