RBS

BNP Paribas’ Shares Could Have Upside Potential

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BNP Paribas’ shares are trading at a fraction of tangible book. If the bank can contain its cost of risk through this cycle and produce double-digit returns on tangible equity on the other side of this crisis, shareholders would do quite well in such a scenario. That said, we point out that Europe is overtraded when it comes to banking, which pressures earnings power at even the stronger banks like BNP Paribas. We’re paying close attention to the key banking players in Europe to assess the likelihood of a global financial contagion that may accompany the global pandemic that has become COVID-19. By Matthew Warren BNP Paribas SA (BNPQF, BNPZY) reported relatively better results than many large global bank peers, … Read more

Lloyds Banking Group Navigates Competitive Markets

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Image Source: Lloyds. The UK banking market is highly competitive with too many players, and we think this is the cause for the low returns on capital across the cycle. We’re paying close attention to the key banking players in Europe, including Lloyds Banking Group, to assess the likelihood of a global financial contagion that may accompany the global pandemic that has become COVID-19. By Matthew Warren Lloyd’s Banking Group (LYG) posted a very difficult first quarter, results released April 30, with net income (IFRS equivalent of GAAP revenue) down 11% to GBP 4.0 billion and statutory profit before tax down 95% to GBP 74 million. One can see many of the highlights (or more realistically lowlights) in the graphic … Read more

24 in a Row! Order the Exclusive Today!

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Image Source: An excerpt from the March 2020 edition of the Exclusive publication. Valuentum offers commentary across the capital stack in the Exclusive publication. In the Exclusive publication, Valuentum highlights three new ideas each month to consider, one for income, one for capital appreciation, and a “short” idea consideration (all three outside our existing coverage universe). Fresh, underfollowed and new ideas — outside our coverage universe — every month! Nothing is held back.  Big Winners Backed by In-Depth Theses Since the monthly Exclusive was first published in July 2016, Valuentum’s mission with the publication has been to produce an unmatched newsletter that delivers ideas with high success rates and ones backed by in-depth theses across the three key themes: income, … Read more

Frozen Capital: What Nobody Is Talking About…Anymore

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Image Source: Janet Ramsden UK property funds have frozen redemptions. What happens when they finally allow investors to flee the country? The US equity markets continue to set new highs, but many risks remain, not the least of which is the fallout to come from Brexit. In some respects, we’re surprised nobody is really talking about it much anymore, but UK property funds have suspended redemptions, even beyond the previous three we reported on, “The Next Banking Crisis? No… Well, Not Yet (July 2016).” This is a big deal because it is just the beginning of the capital-flight process. We think it is wise that such funds are limiting redemptions to avoid an all-out collapse in property prices across the … Read more

The Next Banking Crisis? No… Well, Not Yet.

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Image Source: Berit Watkin “Washington Mutual customers withdrew $16.7 billion in cash from the thrift in the past nine days, a huge outflow that led to the largest bank failure in U.S. history, the institution’s regulator said Friday.” — MarketWatch, September 26, 2008 By Brian Nelson, CFA Let’s get this out of the way. We’re not sensationalistic or bombastic. We’re realistic, and we love focusing on the risks of investing because an investor that knows his downside risks is a much better investor than the one that is only looking at sunshine in the rear-view mirror. I’m going to put it bluntly. We’re starting to hear of some rather serious developments in the UK following Brexit. If the UK pound hitting … Read more

Keep Calm and Carry On?

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Image Source: War History Online, June 22 Brexit may or may not be a big problem. Time will tell. But what matters and eventually becomes its own catalyst, however, is valuation. The forward price-to-earnings multiple on S&P 500 companies (SPY) is currently ~16.5 times, above its 5-year (14.6) and 10-year averages (14.3). This is the real story. Assuming a reversion to the 10-year average multiple, for example, the S&P 500 can be considered “fairly valued” at $1,811, a drop of another 10% from ~2,000 levels. You don’t need us to tell you that the markets have practically gone straight up the past seven years from the March 2009 panic bottom through today, with the S&P 500 effectively tripling since that … Read more

Brexit: Secession Bells Are Ringing!

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First Baptist Church in Columbia, S.C., where the first secession convention in the United States opened on Dec. 17, 1860. Source: Library of Congress, Washington, DC. Photo. Encyclopædia Britannica Online. Web. 24 Jun. 2016. Global markets are plunging, and the implosion may still be in the early innings. Market valuations remain stretched among stagnant global economic growth, and “Brexit” may be the catalyst for a correction. In the paraphrased words of the well-known The Day of the Jackal author, Frederick Forsyth: the peasants have spoken. On June 23, the UK (EWU) held a referendum, in which anyone of voting age could take part, to decide whether the country should leave the European Union. The turnout was incredible at nearly 72%, and … Read more

Dividend Increases/Decreases for the Week Ending March 27

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Below we provide a list of firms that raised their dividends during the week ending March 27. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week AT&T Inc. 4.750% PFD SER C (T.PC): now $0.2408 per share quarterly dividend. AT&T Inc. 5 DEP RP PFD A (T.PA): now $0.3125 per share quarterly dividend, was $0.1701. Bancolombia (CIB): now $0.751 per share quarterly dividend, was $0.3000. Centerra Gold Inc. (CAGDF): declared CAD 0.04 per share interim dividend, was $0.0285. Future Fuel (FF): declared $3.00 per share special dividend, was $0.06. Healthcare Trust, Inc. … Read more