Saturday, December 08, 2007
RBS trading statement boosts banks
RBS issued a superb trading statement on Thursday. The bank announced that earnings for the year would exceed market expectations of 70.5p, despite a large writedown in the value of pooled mortgage investments. Furthermore, management wowed the market with news that the recent giant acquisition of ABN AMRO was proceeding better than forecast.
The shares briefly shot up abover 500p, but closed for the week around 485p. With the report of such strong trading, people are beginning to speculate on just how high the final dividend will be when the company announces results in March.
I started buying shares in RBS at 596p. I am currently way down on that purchase price and it looks as though the shareholding with make a negative contribution to my returns for the year. This is very disappointing. It is a shame that a decision I believe to be completely right is currently showing a large loss. I expect with time, RBS will go on to show a huge gain in my portfolio. The problem is that this will all come too late for 2007's result.
The promised trading update from RC Group is still to arrive. Here's hoping it will be along next week. I am also expecting news from SOCO International, which I also hope will be along in time for the end of the year.
The Artful Dodger
(0) comments
The shares briefly shot up abover 500p, but closed for the week around 485p. With the report of such strong trading, people are beginning to speculate on just how high the final dividend will be when the company announces results in March.
I started buying shares in RBS at 596p. I am currently way down on that purchase price and it looks as though the shareholding with make a negative contribution to my returns for the year. This is very disappointing. It is a shame that a decision I believe to be completely right is currently showing a large loss. I expect with time, RBS will go on to show a huge gain in my portfolio. The problem is that this will all come too late for 2007's result.
The promised trading update from RC Group is still to arrive. Here's hoping it will be along next week. I am also expecting news from SOCO International, which I also hope will be along in time for the end of the year.
The Artful Dodger
Sunday, December 02, 2007
A great week, to be followed by a better one?
Bank shares rose strongly last week in the aftermath of Barclays' trading update. Barclays announced that despite the difficulties in the credit market the company was still on track to produce earnings 'broadly in line' with market expectations of 68.8p per share.
This is fantastic news. It not only confirms that Barclays will make a substantial profit this year and no doubt pay a chunky dividend to boot, it also demonstrates the inherent resilience of Barclay's business model. At a time when banks are announcing huge write-downs on mortgage portfolios around the world, Barclays is able to ride out these extreme shocks and is delivering another year of growth to investors. I purchased the shares at 577p and again at 549p. At today's 567p the shares are trading on a P/E of less than ten. This doesn't seem right for a company that can deliver growth even in times of great difficulties in the financial markets. After initially investing in the belief a P/E of 13 would be fair for this company, I am now wondering if the valuation should be more like 15, putting the shares at over ten pounds each.
Elsewhere in my portfolio I am expecting trading updates from Royal Bank of Scotland and RC Group. At current prices, any announcement other than a profit warning could see substantial uplift in the prices of each of these investments.
Roll on Monday and the rest of the week.
The Artful Dodger
(0) comments
This is fantastic news. It not only confirms that Barclays will make a substantial profit this year and no doubt pay a chunky dividend to boot, it also demonstrates the inherent resilience of Barclay's business model. At a time when banks are announcing huge write-downs on mortgage portfolios around the world, Barclays is able to ride out these extreme shocks and is delivering another year of growth to investors. I purchased the shares at 577p and again at 549p. At today's 567p the shares are trading on a P/E of less than ten. This doesn't seem right for a company that can deliver growth even in times of great difficulties in the financial markets. After initially investing in the belief a P/E of 13 would be fair for this company, I am now wondering if the valuation should be more like 15, putting the shares at over ten pounds each.
Elsewhere in my portfolio I am expecting trading updates from Royal Bank of Scotland and RC Group. At current prices, any announcement other than a profit warning could see substantial uplift in the prices of each of these investments.
Roll on Monday and the rest of the week.
The Artful Dodger
