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Agreed, I took a look at the share price after q1 and h1 results and SP dips for a couple days after before climbing up. Should be £2+ next week.
Furthermore, the reason the sp falls after results is because the institutional investor doesn't want the share price to take off so they sell it down just after the results to scare the little fish off, ready to buy back big once they are happy with the results. My guess
I have no doubt the share price will rise considerably, in fact I think big institutional investors are busy chewing over the latest results and once that info has been digested and they are happy they will buy big. My guess
A decent share price would be good. I bought in July 2015 at £2.78. I have managed to reduce this by a number of share trades but only in profit if I include dividends. It seems to be struggling to go past £2.00 today but I suppose it is Friday. Berenberg raising the target price to £2.45 may help.
what more can any investor want from a share.
Dividends likely to rise this year & next year, massive profits and cash in hand. Thinking of selling my portfolio and investing the lot here!
My brain bleeds, watching barc share price creep up to £2!!! The only thing about barc that's changed since Wednesday is the bank is sitting on an extra £6 billion profit and the knowledge its balance sheet is much much stronger than it was Wednesday.
It defies logic, or is there something in the balance sheet the average man on the street has not seen in the announcement on Thursday, something about the future prospects of profitability????
Barclays is like a coiled spring....love it!
Reminds me of the spring on my car that snapped due metal fatigue!
198.7p was breached but as yet 216p hasn't appeared....200p barrier seems a bigger hurdle, but one concerted effort and we'll be over the top and entering pastures that haven't been seen for a while.
Pantherax Thanks for the detailed reply, much appreciated.
Barclays sp is like a coiled spring being compressed, at some point the energy will released.
The UK Banks are currently sat on huge sums of capital that isn't making them a lot of money with the interest rates at the current level (0.1%) - which is the lowest in the Bank of England's history.
Inflation is rising, and there is pressure on the Bank of England to raise interest rates. Now currently the Bank of England is buying Bonds on the open market and this is known as quantitive easing. This is going to stop soon and UK Banks will be there to pick up the slack. Typically in any economy if inflation was running at 3-4% then you would expect interest rates to be fairly close to that. The BOE won't increase rates that high - it will be gradual. Likely to be moved to 0.25% in November and then to 0.5% in February 2022. If that happens then the banks can sink an awful lot of money safely into Government Bonds where it will immediately start earning them money which they aren't getting today. If inflation doesn't start to cool then interest rates could rise further still without causing any serious issues to the economy - as with inflation comes wage increases, then comes interest rate rises etc. It's only when interest rates get higher like 10% where it can have a serious negative effect on the wider economy and can then become a problem for banks due to large increases in defaults. (I am fully aware that there are people today with Mortgages where an increase to say 2% could be the difference between them keeping there home or losing it - this is true - but not in numbers large enough to destabilise the entire economy).
In the meantime, UK Banks will start to receive a lucrative income that isn't there currently. Barclays aren't as reliant on that type of income as Natwest or Lloyds because they have a strong investment bank. However, the retail side of Barclays that has also done well will definetly benefit so the headwinds are favouring UK Banks currently and long suffering shareholders are in for a good couple of years - and hopefully beyond.
A few points to note:
Jes Staley and Tushar Morzaria advised they weren't surprised by the initial drop on results day and it can be typical as professional investors take to profit taking. But todays drop shouldn't be a worry as the stock is still bearish and will continue to climb.
Buybacks - There have been two major buybacks this year. One of £700m at year end results for 2020 and recently the still 'ongoing' £500m buyback. These are being bought every day at market prices and there is a limit on the volume of shares traded per day that can be bought. So it's not as simple as saying we'll buy £500m @£1.70. They have to buy gradually each day and the price has recently crept up. But even @£2 per share they're being bought back cheap when compared to the net asset value for each share of £2.87. If the share price was above that then shareholders would be better served getting excess capital back as a dividend (noted some would just prefer that anyway but that's not my talking point)
The example quoted by the CEO was this, "Essentially right now if our stock is worth £1 we are buying back at 70 pence. So you are getting that 30 differential for free. That is why buying stock back is so attractive"
Whilst he was using those figures to explain the banks approach I actually think we're getting a far better deal on the two buybacks over the last year.
In terms of progress, the bank has had a target for a number of years of a 10% return on equity. The last few years they have fallen short of that target. We're on the 3rd quarter this year and the figure is already at 15%. So even if Q4 is really bad they will comfortably hit that target of 10%. The bank is well positioned now to hit a 10% return on equity year in year out.
Dividends - The bank has announced at the interim results that they will pay a dividend on a progressive basis. So that has already been confirmed as 6p for 2021. They will pay a slightly higher dividend in 2022 and slightly higher again in 2023. The aim is to have a dividend that grows with the growth of the bank every year and that it is very consistent. So if in 2021 the bank has made 35p per share and it has paid out 6p in dividends then there is a lot of room for a progressive dividend over the coming years. A consistent buyback program in support of this and a consistent return on equity of 10% then the stock will grow.
Back to a point in an earlier post, you only have to look at the experience of the major US Banks. They were all trading at this sort of level two years ago, but they kept generating levels of profitability that Barclays is now looking at. So I believe the markets will eventually, within a couple of years value Barclays above it's net asset value which is what we were used to pre-financial crisis.
All week barc share price was hitting £2 based off of expected earnings/profits. Today actual real earning/profits came out, earnings up profits nearly doubled and the share price goes DOWN. The sp is down more than likely because one cylinder out of six wasn't performing as well as it might have. But they were more than happy to invest in barc on the news, but dump the stock on very good facts. Its the craziest sh*t I have ever witnessed!!!
Staley should start the buybacks around about now, he would do us investors in this stock proud, but they always seem to buyback when the stock is near a peak, never when its at its trough. So in conclusion the bank is much stronger financially than it was yesterday and its sp is less. Barc has to be a bargain, but the buyers have run for the hills today because the profits have doubled and the news is much better as fact, rather than yesterdays fiction.