City investors can go mad for certain shares often with little reason, but it’s difficult to work out why the Winkworth share price has ‘gone mad’ and leapt by 22% over the past four weeks to £1.60.
Its share price had been moving up and down somewhat predictably for over three years, ranging from £1 to £1.20 a share before getting a boost, like all the industry’s other listed corporates, following the general election.
But the City had, until that point, largely ignored or downgraded many of the big estate agency’s stock as the housing market struggled following the EU Referendum vote, including Winkworth’s.
But the company’s latest trading update, which would normally prompt only a flicker of interest among investors, instead sent its share price soaring on January 15, and it hasn’t looked back since.
“Something is afoot as there is no reason for such a high share price,” says industry analyst Andrew Stanton.
At the time of its latest results, Winkworth reported increasing market share in its key Home Counties markets and particularly in London, where it now claims to be the No.2 estate agency chain for sales subject to contract, with a market share of 4.2%.
“We are very pleased with the progress made against a difficult market in 2019 and, once again, to be in a position to raise our dividend payment,” said Dominic Agace, Chief Executive Officer of Winkworth.
It is this raised dividend payments which, according to investment forum chat, is a key reason why it’s stock is so popular.
“I love this company and have held for several years. It plods along nicely and pays a dividend four times a year. It even pays special dividends if it makes too much cash…. What’s not to like?,” says one investor in a post.