Is the Time to Invest in Banks approaching?

sabretoothtigger

Well anyone can say that sorry. Fair enough you did actually post a free message on an anonymous message board, its pretty non committal though and actually waving goodbye to that money for 6 months and maybe forever was what was required.
I held some bank shares when you posted that but unfortunately I bought too early and I sold alot of them too early also as I didnt figure on such a strong recovery so unfortunately the devil is in the detail and saying I would have done that doesnt really compare to I did do that.

Barclays, rbs and lloyds all rose from jan to feb then went right back down again, anyone with a stop loss might have cashed in their little profits (relatively) and not thought to buy back in at the perfect time, cant ever tell unless the money was actually in there



A broker rated Barclays for 440p recently but I reckon they might approach 300 sometime in the next year. That'd still seem expensive compared to 50p though. Due to pay a dividend early next year I think?

If the barclays price falls below 360 it will be weak short term which confirms his speculation here I guess

It was 357 on friday briefly. Not sure if this qualifys as a clean break below, probably not. The guy who wrote the chart above now says he expects a rise, I dont really agree but its just a guess.

sabretoothtigger

I think barclays shareprice might decline short term but long term prospects for growth available, some good discussion here:

http://www.morningstar.co.uk/uk/news/article.aspx?articleid=83943&categoryid=660


Shares will pay a 1p dividend, quarterly afaik

Bulls Say
1. Barclays has deftly sidestepped the huge write-downs taken by many other investment banks. Its strong position will allow it to gain market share at the expense of weaker rivals.
2. Prudent management practices such as bold measures to fix underperforming units and a strict adherence to generating economic profits should benefit shareholders.
3. Barclays Capital's push into emerging markets, such as China and Africa, will diversify the company's revenue stream and help stabilize profits, which will be especially valuable in the current difficult economic environment.
4. Barclays' acquisition of Lehman's operations out of bankruptcy enabled the bank to buy a very profitable business for a song while leaving behind the riskiest assets.
Bears Say
1. Barclays' aggressive growth has come back to haunt the firm in the form of dilutive capital raises, but confidence in the bank remains shaky. If confidence erodes once again and funding dries up, Barclays may have to take dramatic actions to raise capital.
2. Barclays' failed bid for ABN AMRO may not be the end of the bank's empire-building ambitions or its habit of overpaying for acquisitions.
3. Delinquencies are rising rapidly in Barclays' loan book, especially in commercial lending. Loan losses are likely to wipe out any windfall profits from investment banking.
4. Barclays makes about 60% of its loans in the UK, which is facing an ever-deepening recession. Delinquencies there could cause significant losses at the bank.
5. Barclays' trading profits are likely to decrease as regulators sharply increase capital requirements and as competition reduces spreads.

StevieJ

BT wrote: »

I’m relatively new to buying and selling shares so any help/comment on the following would be gratefully appreciated:

I see the bank shares have tumbled to pennies from the several pounds they were last year. I therefore think we may be approaching the time when we should consider buying them once again. My theory is that as with all shares, the bank shares will eventually go back up – may take ten years or more. Invest little in them now so that total loss won’t cripple you and wait for potentially huge gains in the future – far better than putting money in saving account over.

In order to try and workout which bank share to buy, I started looking into its financial figures. I know lots of sites tell you what the current share price is now and graph of the past, but where can I find the following info quickly and easily without going through lots of web sites and company results:

· Current value
· What the bank is forecasting as its profit or loss
· What the city is forecasting as its profit or loss
· How much debt it’s in
· How much the government has invested (loans, guarantees and capital), and therefore how much it now owns. I guess if it owns more than 50% then it’s in control and decides on whether to pay dividends or not.
· Any other info you think should be considered when trying to make this decision

Basically, what are the best free sites I can use to make an informed decision on which bank to invest in. And what’s everyone view on investing in Banks in the very near future.

I am amazed that no one thanked you for that post, it stimulated a very good debate,
well let me be the first and I hope you were financially rewarded :beer:

sabretoothtigger

Bravo that chappy indeed. There was alot of negative speculation back then and viewed from a distance that in itself was a contrarian indicator.
I cant say I managed that perspective myself but hopefully a lesson learned though I think at least some of the banks really were insolvent, inflation is probably to their advantage going forward

A broker rated Barclays for 440p recently but I reckon they might approach 300 sometime in the next year.

Back in sept that was and turned out that way and we came to about 264 for Barclays. Im not sure that is the low now and 400 next stop, etc Its possible but I expect more weakness before it stays above 330 medium term

Lloyds needs to stay above 60 as alot of the new shares will be in short term trading hands, it should display weakness before any big rise

The banks in feb rose but fell again as the general market came down early march. So we now have a rising market and more positive banks so I'll opt for them being dragged back down some with the market - consolidation required



Price adjusted retrospectively for current share base

melbury

I would have thought that if Lloyds shares were going to drop dramatically because of the rights issue, it would have happened by now, whereas they seem to be going up:T I know it is early days, but hopefully they will keep going, after all they were basically the best of the banks before the HBOS debacle.

sabretoothtigger

"Lloyds Banking (LLOY)

I may be on my own on this one, but the losses and the higher impairments appeared to be a very poor performance given the way that the banks currently have a license to profiteer - if they choose to. The charting position shows the way that even the threat of a good result could not get the shares back above the top of a falling November price channel at 55.5p. Only a weekly close above this today would suggest that the shares are not a sell into strength to target the sub 50p zone one more time."




lloy were tipped by the telegraph today along with rbs however this seems like poor timing even if perhaps correct very long term



BARC - possible breakout I guess

sabretoothtigger

FSA tells banks to renew stress testingRegulators have ordered UK banks to run a new round of tougher stress tests that assume the economy will endure a double-dip recession that would force unemployment up to 13.3 per cent.

http://link.ft.com/r/BLH300/8AM11O/10TH4/S3BESG/S3P1RU/HK/h

Masomnia

In a bit of a change of strategy I am considering buying into Lloyds in the next few days.

I'm wondering if now may be a good opportunity.

With the preference shares paid off and the business profitable again dividends may not be too far off on the horizon; and whilst the income will be nice I should expect that the share price will advance pretty strongly if a return to paying a divi is announced.

And, after today's dramatic fall, the market cap is lower than the total equity, ie. assets - liabilities of the company. In a profitable business this is surely a sign that it is worth a look at least!

sabretoothtigger

The dividend is banned till 2012 I think ? What they dont pay out is a point in favour of the share price so no worries really. Their assets worth is very debateable since its housing and you only have to see the forum here for the varied views on where thats going

I agree long term bullish but it may be at a better price at some time. Barc and RBS even may be better value though also more risky

blinko

I dont thinkt he banks will pay a divi for a while they have cash requirements and i think it may be a joint effort, as if barc pays a divi it may surpress other bank shares at tax payer expense of course barc can but then we get into divi wars and the banks are still reeling from sub primse debt and all that

if you want divis go to shell