Is this a once-in-a-decade opportunity? Wistry (LSE:VTY) shares? It’s been 10 years since the stock price was this low. Longer, in fact, as it has now fallen to a 14-year low. The price-to-earnings ratio is eight and is one of the lowest on the market FTSE250. Freefall also occurred recently. The stock has lost 25% of its value in one day this month. Novice investors can now buy the stock at a price 76% below what they would pay in 2022.

While such a immense decline may be a warning sign, the obvious question is whether this is a great opportunity to buy at the low? Are Vistra shares a budget-friendly deal?

Changes

The first crucial issue to consider is the rest of the housing sector. If we compare to the level from which Vistry fell 76%, we see that other stocks have also suffered. Other UK homebuilders such as Persimmon (down 35%), Taylor Wimpey (down 45%) and Barratt Redrow (down 53%) have not escaped the carnage.

The main problem is that margins are becoming increasingly squeezed. Supply-cost inflation is rising, wages are rising, and mortgages are more high-priced as interest rates rise. For this notoriously cyclical sector to turn around, we would likely need to see some changes.

The fact that Vistry is the worst is probably due to the nature of its business. In addition to building and selling houses to the public, their implementation is often commissioned to partnerships – local authorities, housing associations and the like. This can mean stability in good times, but recently it has led to lower margins and alarming profit warnings.

Finally, longtime CEO Greg Fitzgerald announcing his departure didn’t facilitate either.

Key point

So what are the reasons for optimism here? The standout statistic is certainly the valuation, with a price-to-earnings ratio of just eight, one of the lowest in the entire London Stock Exchange. This means we’re earning a lot for each share, which is a sign that the stock price may be at its lowest point.

As mentioned, housing tends to be cyclical. During the boom years of the early 2010s, many home builders went bankrupt. The share price of Vistry – then known as Bovis Homes – tripled in less than five years, even before dividends were taken into account. Perhaps the key point is that investors would have to agree after the 2008 crash.

Buying a sturdy stock at its lowest point will always prove to be a winning stock market strategy. It’s not obvious that Vistry will be one of those sporadic, once-in-a-decade buying opportunities today, but it very well may be. I think investors might want to consider this.