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Banks, analysts and my portfolio

andyalan10
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Banks, analysts and my portfolio

#517280

Postby andyalan10 » July 26th, 2022, 10:30 am

What a pity this board has been silent all year.

In January this year I wished to reduce my portfolio. I held HSBA, BARC and LLOY. At the time HSBA had a lower yield, a higher PE ratio, and analysts were significantly less positive on them than the other 2 banks. I reduced HSBA.

In the subsequent 6 months, HSBA are up 10%, BARC down 20% and LLOY down 15%. Analysts are still significantly more positive on BARC and LLOY (c75% buy ratings rather than 50% for HSBA).

Today the respective PEs are 11, 4 and 6. Yields are fairly similar.

Now I am wondering whether to sell the rest of my HSBA, and if so whether to put the funds into one of the others, or a different financial e.g. LGEN. Or maybe even a less UK focussed bank. I'm nervous on HSBA with its Chinese exposure, having been bruised on Russia already this year.

Thanks for reading

Andy

Dod101
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Re: Banks, analysts and my portfolio

#517315

Postby Dod101 » July 26th, 2022, 12:25 pm

andyalan10 wrote:What a pity this board has been silent all year.

In January this year I wished to reduce my portfolio. I held HSBA, BARC and LLOY. At the time HSBA had a lower yield, a higher PE ratio, and analysts were significantly less positive on them than the other 2 banks. I reduced HSBA.

In the subsequent 6 months, HSBA are up 10%, BARC down 20% and LLOY down 15%. Analysts are still significantly more positive on BARC and LLOY (c75% buy ratings rather than 50% for HSBA).

Today the respective PEs are 11, 4 and 6. Yields are fairly similar.

Now I am wondering whether to sell the rest of my HSBA, and if so whether to put the funds into one of the others, or a different financial e.g. LGEN. Or maybe even a less UK focussed bank. I'm nervous on HSBA with its Chinese exposure, having been bruised on Russia already this year.

Thanks for reading

Andy


HSBC is the only bank I hold and am likely to hold and when it reports its half year results next week I imagine they will be quite encouraging. legal and General I also hold and they have done very well with their trading and dividend but the share price continues to lag. I do not know why because they are a very well run operation.

Pay no attention to analysts.

Dod

Dod101
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Re: Banks, analysts and my portfolio

#517342

Postby Dod101 » July 26th, 2022, 1:55 pm

Dod101 wrote:
andyalan10 wrote:What a pity this board has been silent all year.

In January this year I wished to reduce my portfolio. I held HSBA, BARC and LLOY. At the time HSBA had a lower yield, a higher PE ratio, and analysts were significantly less positive on them than the other 2 banks. I reduced HSBA.

In the subsequent 6 months, HSBA are up 10%, BARC down 20% and LLOY down 15%. Analysts are still significantly more positive on BARC and LLOY (c75% buy ratings rather than 50% for HSBA).

Today the respective PEs are 11, 4 and 6. Yields are fairly similar.

Now I am wondering whether to sell the rest of my HSBA, and if so whether to put the funds into one of the others, or a different financial e.g. LGEN. Or maybe even a less UK focussed bank. I'm nervous on HSBA with its Chinese exposure, having been bruised on Russia already this year.

Thanks for reading

Andy


HSBC is the only bank I hold and am likely to hold and when it reports its half year results next week I imagine they will be quite encouraging. legal and General I also hold and they have done very well with their trading and dividend but the share price continues to lag. I do not know why because they are a very well run operation.

Pay no attention to analysts.

Dod


If you are nervous about HSBC (and I can understand why, although I think they will be OK) then you may of course want to sell the remainder that you hold. Legal & General would be I think a good home for the proceeds. I certainly would not put the proceeds into one of the other UK banks. For income, I hold Toronto Dominion so I should have said that HSBC is the only UK based bank that I hold. The record of the Canadian banks is very good.

Dod

andyalan10
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Re: Banks, analysts and my portfolio

#517900

Postby andyalan10 » July 28th, 2022, 1:03 pm

Dod101 wrote:
Pay no attention to analysts.

Dod


I tend to agree, my normal nvesting style is "buy stuff that looks cheap, sell some if it goes up" but I do wonder if more in depth analysis would yield beter results. I assume analysts do more in depth analysis, in which case it's hardly a ringing endorsement is it?

My urge to trade has been satisfied this week so I'll await all the results and see how Mr Market reacts over the next few days.

Thanks for the Canadian banks suggestion, you would think they tick the boxes for foreign diversification and low political risk.

Andy

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Re: Banks, analysts and my portfolio

#517902

Postby Dod101 » July 28th, 2022, 1:13 pm

andyalan10 wrote:
Dod101 wrote:
Pay no attention to analysts.

Dod


I tend to agree, my normal nvesting style is "buy stuff that looks cheap, sell some if it goes up" but I do wonder if more in depth analysis would yield beter results. I assume analysts do more in depth analysis, in which case it's hardly a ringing endorsement is it?

My urge to trade has been satisfied this week so I'll await all the results and see how Mr Market reacts over the next few days.

Thanks for the Canadian banks suggestion, you would think they tick the boxes for foreign diversification and low political risk.

Andy


In very broad terms, I look at the culture rather than too much in depth analysis of Balance Sheets. That meant that for example I did not get burned in 2008 with the UK banks (I would never have touched RBS in a million years) and I never held Carillion, having argued with many who thought that all these contract wins were a sure sign of success. Analysts seem really to have no 'feel' for the market but rely on looking at the financials at a given point in time. Investing is more art than science I think.

As for Canadian banks, they have not done much this year but last year they did very well on the capital front, and manage to keep increasing their dividends year on year.

Dod

SalvorHardin
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Re: Banks, analysts and my portfolio

#517904

Postby SalvorHardin » July 28th, 2022, 1:24 pm

Here's the thread where Canadian banks are discussed at some length.

https://www.lemonfool.co.uk/viewtopic.php?f=31&t=23185

The last time any of the big five Canadian banks cut their dividend was in 1940. Shareholders in British banks in recent years breathe a sigh of relief when a dividend isn't cut or abolished.

https://financialpost.com/investing/why-canadas-big-banks-defend-dividends-in-coronavirus-market-rout-and-at-all-other-times


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