rbs shares, to buy or not to buy?

mrposhman

mstopham wrote: »

I have been doing the dipping in and out with RBS, Barratt's, Vodafone and Lloyds and am up 56% at the minute after broker fees. (I was very very lucky with getting RBS at 10.7p)
I am only in it very small time at the moment, trying to build up experience.

I would agree with those advising some sort of diversification maybe 25% into RBS 25% into a construction firm and split the other 50% on FTSE 100 paying dividends.

And for an online broker I have used Hoodless Brennan and they seem perfectly adequate so far and only £8 per trade.

Sometimes it works, some times it doesn't.

One set of Barclays shares (I've topped up since) are up 172%. I could have quite easily sold out at say a 25% or a 50% gain but I could have missed out completely by moving to a share with less growth just through overtrading.

I've only been trading around 6 months and started off trading in and out far too much never really holding stocks for long enough to realise what I needed or wanted to. It was then, that I realised that I have no idea what I'm doing when it comes to day trading and until I understand things better I would keep to going long. Since then I've done very well on most of my shares. I only hold 7 shares, there are only 2 that are down and these are legacy shares of my earlier days and they are Lloyds and Aviva which should come good over time. The others from going long I currently have gains of

Share 1 - breakeven and 33%
Share 2 - 120%
Share 3 - 42%
Share 4 - 104% and down 14% but overall well up
Share 5 - (Barclays) 172%, 83% and 87%

My point is, you obviously need luck a bit on your side (and also a healthy bit of research) for your entry point but as long as you research companies the going long should hopefully work out better. I've tried both in a short period of time and in my albeit short experience, I much favour researching companies financials, finding out whether they have good prospects and good news coming up and if so getting in with a proper price target. My overall price target at the moment is pretty set in stone on most of these (though things always change, I've upped my target for Barclays) but my aim at the moment is to turn a profit of around 200% meaning that my overall shareholding will have just less than trebled in a few years. Obviously time frames are variable as some will hit their price targets much earlier than others (in theory) but I'm hopeful that these will happne. I've got full confidence in the business models of the companies I'm invested in and I'm not sure you do if you trade in and out regularly, though i accept that this can be a moneymaker but in my view you have to have luck on your side. Going long, I feel is less about luck and more about research.

just an example of how things can be done differently.

sabretoothtigger

(though things always change, I've upped my target for Barclays)

How does that compare to the ftse index at the time you set the target and now, its easy to get lost on the valuing of one share

mrposhman

sabretoothtigger wrote: »

How does that compare to the ftse index at the time you set the target and now, its easy to get lost on the valuing of one share

Completely outperformed the ftse but in my view still has legs to run further. Maybe I will be right, maybe I will be wrong but based on the fundamentals there will probably be a downward slip at some point but the upward trend is well and truly on track at the moment. Maybe things will change but as it stands, I reckon theres still further to go despite outperforming the ftse over the last few months. Don't forget that it also completely underperformed the ftse for several months and imo is rebalancing itself now that banking appears to be out of the woods in terms of complete destruction.

sabretoothtigger

Ok but it was 1.80 back at the start of Jan so there is a point the other end of the rollercoaster to compare its value vs ftse and the banking sector.
Not saying you shouldnt up the target but it doesnt have to be done blind.

A figure could be placed on just how much more the market values or is optimistic on barclays now then back in january at the same price


Like I was just trying to sum up standard life over time
A price target of 230 back in Jan would mean a price of 200 now vs the ftse or vs its sector its only worth 1.67.


I had no price target for barclays in Jan so its hard to compare but
1.84 in Jan 12th would be vs ftse 1.66 now or by sector it'd be 1.55

mrposhman

sabretoothtigger wrote: »

Ok but it was 1.80 back at the start of Jan so there is a point the other end of the rollercoaster to compare its value vs ftse and the banking sector.
Not saying you shouldnt up the target but it doesnt have to be done blind.

A figure could be placed on just how much more the market values or is optimistic on barclays now then back in january at the same price


Like I was just trying to sum up standard life over time
A price target of 230 back in Jan would mean a price of 200 now vs the ftse or vs its sector its only worth 1.67.


I had no price target for barclays in Jan so its hard to compare but
1.84 in Jan 12th would be vs ftse 1.66 now or by sector it'd be 1.55

But you are ignoring the decline in bank prices from last year. If you looked at a 6 month view, I would expect to see Barclays to be well below what it should be based on the Ftse movements over the same period.

I think banks are still undervalued and as more and more of the bad news is expelled (what and see Q1 results) then banks will continue to outperform the ftse due to completely underperforming the ftse in the last 2 months of 2008.

sabretoothtigger

They are a premium to the rest of the banking sector going back further then 6 months.
If we go back a year then Barclays are level with overall downgrades to the ftse banking sector but otherwise they are now rated more optimistically then before

Obviously this could be correct, Im not saying they should be sold just that they are highly valued it would seem.

Lloyds and RBS have been diluted in their shares so have naturally fallen, Im not sure if this adjusted for in the figures. Barclays have issued those warrants to the arabs for new shares, they havent been taken up yet but I guess the market would account for it.

If it were compared to HSBC then its about 18% lower over the year, since last july its outperformed HSBC slightly and since October its done better by 25%.
Its possible better value exists elsewhere in the sector but mainly here Im trying to judge sentiment rather then trading figures I could only guess at

They were over 4 pounds in september, briefly

http://finance.yahoo.com/echarts?s=%5EFTUB8300#symbol=%5EFTUB8300;range=1d

mrposhman

sabretoothtigger wrote: »

They are a premium to the rest of the banking sector going back further then 6 months.
If we go back a year then Barclays are level with overall downgrades to the ftse banking sector but otherwise they are now rated more optimistically then before

Obviously this could be correct, Im not saying they should be sold just that they are highly valued it would seem.

Lloyds and RBS have been diluted in their shares so have naturally fallen, Im not sure if this adjusted for in the figures. Barclays have issued those warrants to the arabs for new shares, they havent been taken up yet but I guess the market would account for it.

If it were compared to HSBC then its about 18% lower over the year, since last july its outperformed HSBC slightly and since October its done better by 25%.
Its possible better value exists elsewhere in the sector but mainly here Im trying to judge sentiment rather then trading figures I could only guess at

They were over 4 pounds in september, briefly

http://finance.yahoo.com/echarts?s=%5EFTUB8300#symbol=%5EFTUB8300;range=1d

According to those charts, since 14th October the ftse 100 has fallen by 9.3%, Barclays has fallen by 27.8% and the ftse 350 banks have fallen by 35%.

Obviously, this prices barclays at a premium to the other 350 banks but whilst the following conditions are met then they will continue to do so

- Lowest amount of capital raised
- One of the best capital ratios
- More on an investment banking arm than some of the others (should bode well for Q1 results)
- Kept HMT at bay, not even in the APS

I think if these continue then the market will continue to price barclays at a premium to the others including HSBC. It doesn't look as if this site has rebased any prices for increases in shares so therefore a comparison to RBS and Lloyds drops doesn't bode well and even the same can be said with hsbc as they have just undertaken a rather large RI. Whether or not the rights have been issued, I'm not sure, but there is almost always an early pricing in of the rights, maybe not all of the impact but some of it so therefore barclays performing better than HSBC is likely.

Barclays seem like on of the best placed banks to succeed in this environment and look likely to increase their position as one of the best run banks in the future. In my view they have still got some way to go and should get there quicker than some of the others hence the reason I'm not selling out at over a 170% profit. Maybe thats me being greedy and I will be made to eat my words but in my view there is plenty of upside. Maybe not today, maybe not tomorrow but as I have said, I'm in for the long term.

sabretoothtigger

cool, hopefully you are right and I hope they issue a dividend this august

Barclays rights issue price was 282 last July and like I said those guys could have made over a pound per share in the brief rally till Sept 08
http://ibtimes.co.uk/articles/20080718/foreign-investors-barclays-rights-issue-qatar.htm


Also in sept on that massive share spike, the ftse went up 10% or something. On that day Barclays were issuing more shares for capital then, selling into the rise
lloyds did it too I think


Anyway I was just posting to mention the XLF which is USA based and related, its trading right now.
Looking very healthy, if it sustains its previous gain on thursday it should translate very well

http://finance.yahoo.com/q?s=XLF


April 15th is USA tax year end which I guess may be significant, not sure but Goldman issue results soon if I remember right


http://www.investorresearch.mdgms.com/factsheet/factsheet.html?ID_NOTATION=266507

14-Apr-09 Barclays BARC Panmure Gordon Sell 198.90p 40.00p - Reiteration

mrposhman

sabretoothtigger wrote: »

cool, hopefully you are right and I hope they issue a dividend this august

Barclays rights issue price was 282 last July and like I said those guys could have made over a pound per share in the brief rally till Sept 08
http://ibtimes.co.uk/articles/20080718/foreign-investors-barclays-rights-issue-qatar.htm


Also in sept on that massive share spike, the ftse went up 10% or something. On that day Barclays were issuing more shares for capital then, selling into the rise
lloyds did it too I think


Anyway I was just posting to mention the XLF which is USA based and related, its trading right now.
Looking very healthy, if it sustains its previous gain on thursday it should translate very well

http://finance.yahoo.com/q?s=XLF


April 15th is USA tax year end which I guess may be significant, not sure but Goldman issue results soon if I remember right


http://www.investorresearch.mdgms.com/factsheet/factsheet.html?ID_NOTATION=266507

Glad I am still holding my barclays shares :beer: Thankyou Goldman Sachs :D

US tax year end is December 31st but April 15th is the date for tax returns to be filed. Haven't done mine yet as the IRS haven't provided me with my ITIN yet.

sabretoothtigger

Ok thanks, I guess tax returns isnt much significant. Should have double checked that, just looking for some significant date or news

I think Barclays have for the moment peaked today maybe
The xlf weakened, its not bad but is below 3 day volume weighted average price which means the short term speculation is pointing down just now

The price in barclays I was thinking today is moving on the big buyers, it does seem fairly solid but I just keep remembering they still went to 67 after feb results

There's nothing wrong with investing in bank stocks today, as long as you take it for what it really is -- primarily an exercise in hoping other investors' optimism will stay alive longer than you plan on holding the stock. Without further details (most banks haven't even reported official earnings yet), we're truly looking at blind optimism, rather than shrewd investing.

http://www.fool.com/investing/general/2009/04/14/euphoria-ignites-bank-stocks.aspx