Will the Hammerson share price recover in 2021?


first_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images Hammerson (LSE:HSMO) recently released its 2020 full-year results and reported its biggest loss since its incorporation in 1940. But the Hammerson share price increased by 20% on the news!If you’re confused by this, you’re not the only one. Let’s take a look at what happened, why the share price went up on bad results, and whether I should be adding the stock to my portfolio.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…A rising share price after a record lossHammerson is a real estate investment trust. This means the business buys properties, rents them out, and then returns 90% of its earnings to shareholders via a dividend. In the case of Hammerson, the properties that it invests in are shopping centres.With the lockdown restrictions preventing non-essential stores from opening, many shopping centres and malls were predominantly deserted last year. And due to the reduced footfall, store owners struggled to keep up with lease payments.Consequently, Hammerson’s rent collection dropped to 76%, new leases fell by 35%, and the overall occupancy level dropped from 97.2% to 94.3%. Combining all these factors led to the company reporting a £1.7bn loss for 2020.Needless to say, those are pretty terrible results. So why did the Hammerson share price increase by 20%?Reasons to be optimisticThe UK government recently unveiled its plans to ease lockdown restrictions. Under the proposed roadmap, non-essential stores will be able to re-open their doors as of April 12. This is fantastic news for Hammerson, store owners and the economy in general.What’s more, economists at Deutsche Bank have estimated that more than £160bn of excess savings currently sit in bank accounts. This excess has built up from the simple fact that the usual consumer spending destinations have all been closed for months. An estimated 5%-10% of these savings are expected to be spent shortly after restrictions are lifted, leading to a significant increase in the UK’s GDP.The pandemic has definitely created chaos for Hammerson’s business as well as its share price. However, it has successfully kept up with its expenses and even raised £800m in 2020 by rights issues and selling some of its properties. Another encouraging sign is that the management team has announced its intention to re-establish the stock’s dividend and pay a special dividend as well. If approved by shareholders at the annual general meeting in May, the combined dividend payments will be equal to 2.2p per share, which at today’s price of 38p, is a yield of 5.7%.Hammerson share price: time to buy?The worst does seem to have passed for Hammerson. At least that’s what I think. But it still has challenges ahead. For example, many retailers are in danger of going under post-pandemic and Hammerson may continue to see its occupancy levels drop.However, assuming that everything goes smoothly and tenants are once again able to meet their rental fees, I believe the Hammerson share price will recover in 2021.Having said that, I’m not particularly interested in adding the stock to my portfolio. Shopping centres have seen a slow decline in footfall even before the pandemic hit. As e-commerce becomes more prominent and delivery infrastructures more developed, I believe this downward trend will continue over the long-term. And with it, the Hammerson share price. Zaven Boyrazian | Wednesday, 17th March, 2021 | More on: HMSO Our 6 ‘Best Buys Now’ Shares Will the Hammerson share price recover in 2021? I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.center_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Zaven Boyrazian does not own shares in Hammerson. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Simply click below to discover how you can take advantage of this. Enter Your Email Address Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! See all posts by Zaven Boyrazianlast_img

Leave a Reply

Your email address will not be published. Required fields are marked *