The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Barclays website has annual reports dating back to 1990. It includes all useful information.
For the stock price peak year 2005, 2006 and 2007 (right before financial crisis), net profit after tax were £3.409B, £4.541B and £4.392B respectively. Per share profit were: 52.6p, 69.8p and 66.7p. Dividend were: 26.6p, 31p and 34p.
End of year price of 2005, 2006 and 2007 were: 564.4p, 674.33p and 467.88p. The total share counts was 6.587B. If we finish 2024-2026 share buybacks, the total share counts will be ~ 2x 2007 end of year share counts.
Now let's take a look of the recent 3 year total profit. 2021, 2022 and 2023 were: £3.957B, £3.65B and £ 2.753B. 2022 had over issuance penalty and 2023 had restructuring cost. Excluding those silly cost, Barc profit in 2022 and 2023 were very close to 2005. 2021 was clearly higher than 2025. Using 2005 stock price 564p to scale to the estimated profit 10% RoTE 335p, we can earn 34p. The derived share price should be 364p. If we use 2006 as reference, stock price should be: 328p. Average of these two is 346p. If we use 2007 as the reference, stock price should be: 238p.
By year end of 2007, the financial crisis had been very clear. We saw large US banks failing. Today's price is even lower than 2007 year end price. It is hard to justify it. So a massive buyback makes a lot sense. At a normal year like 2005 and 2006, Barc stock should trade above 300p already.
In the past 15 years, barc stock has gone through a lengthy, painful down trend. Now, this trend just started to reverse. We should see a long up trend for EU banks in general and Barc specifically.
Very good helpful analysis
Helps puts things into perspective and context
JamesY, super insightful way of looking at Barc!!
If they just keep not having more scandals, then I think we have further to go!
Thanks for the reply James, it’s a great reply backed up by facts so much appreciated and is good for thought.
In my mind anything pre 2008 is fraudulent, the banks were commiting unprecedented fraud and the share prices were getting carried away thinking that would last forever.
2008 broke the financial system and we have been chasing our tails ever since theough QE. I think the market knows this now and that’s why I think Barcs will never see those levels again. Mid £2 maybe.
Personally I think these profits from previous years are to be expected when there was such a large volume of money thrown into the economy and spending went absolutely stratospheric.
It was like throwing petrol on an ember to reignite a fire and it blowing up in our faces, and now it’s all about burned out.
How can we call profits profit when it’s just artificially created money made out of thin air? Banks are lending numbers made up on a screen that don’t exist and making a ‘profit’ on interest on money they don’t even have or can back up if needed.
I sometimes wonder if part of covid was an excuse to give everyone money and let them blow it all just to increase money in circulation and prevent a collapse.
Gap watch Barc -
2nd-3rd Nov 23 - 133.4p
19th-20th Feb 24 - 150.46p
20th-21st Mar 24 - 175.98p
17th-18th April 24 - 181.1p
19th-22nd April 24 - 185.9p
22nd-23rd April 24 - 190.04p
24th-25th April 24 - 193.44p
3rd-7th May 24 - 203.4p
11th-12th Aug 15 - 278p
It is definitely struggling with 215 - can it push through?
Needs to close above 215🙏🏻
Trying to tiptoe past 215 as we speak.
I need to start looking at this another way I think, a non realistic kind of way. Madness if you ask me!
Looks like I’m the only person shorting this!
In short term, BARC seems over bought in many technical indicators. But for long term, there is a long way to go. You should cover your short position whenever there is a pull back. Nobody knows where they will push this stock to.
Using Graham's valuation formular sqrt(22.5*EPS*TNAV), the value is £5.06/sh. BARC may not hit that high, but many US stocks are trading in fashion or even more.
Good to see it push through 215
I think we will be seeing how much resistance there is at 220 shortly, the hope is there's not much due to all the positivity around inflation and the likelihood of low interest rates.
Barclays has always suffered from negative sentiment, and also Investors feel , the board is not interested in the shareholders....
That's has changed with the Barclays review where shareholders are the main beneficiary
That's why the rise in share price
Also I think the US Inflation report is out tomorrow, hit figures will hit Barclays hard, soft inflation will help leap Barclays beyond £2.20
Bit surprised by the move this afternoon - The US numbers didn't seem that shocking.
I think it is time to sell Barclays and bank profits. US inflation is not as bad as imagined so money is going back to US equities. Until the beginning of this week FED cuts were not expected at all this year so the money was moving out of US equities and coming into FTSE but with todays inflation figure, money is going out from FTSE back into US so is the drop in Barc, LLOYDS, IAG and few others IMO
I think this will have a test of £2 by the end of the weekend. US is still climbing and chronically overvalued imo. we all know when the US has a bad day the FTSE follows along like a lost puppy. I think everything is overbought and needs a big correction if you ask me.
Rookie
Your predictions have been lacking lately.
Onelongrunner I don’t expect it to happen overnight, this happened last time I shorted from these levels. I said the same then as I’m saying now, the same problems from 2008 are unfolding again. It could take years for the real crash or they could keep convincing everyone that everything’s fine and just keep those money printers flat out.Or I could be wrong who knows, don’t take it so personally.
Rookie,
You said 200 by this Friday?
You’re giving me way to much credit as if I’m usually right mate.
Rookie
Ok, you crack on.
Nows your chance to explain to me then, what would you say the reason behind a 20% increase in the ftse since late 2022 to now, around 18 months? Would you say that’s really justified when 75% of the nation is living week to week and have minimal money spare? House buying is stalling so they are lowering the deposit amounts on top of all the help to buy etc that has millions in negative equity.
Yes an absolutely huge amount of cash was injected to the system but no one seems to think that has any relevance. How have we ‘avoided’ a recession? “V shaped recovery” My guess is it’s just more lies to try and instill confidence and that’s why gold isn’t being shaken in the slightest.
Again, this is just my thoughts and I’m open to hear your opinion.I’m not sure why you take it so personally
The other 25% controls the stockmarket and the narrative is controlled, at the moment the narrative is positive, I've might be wrong but I've not heard of Shorting for the long term like you seem to be suggesting, the fees will just continually add up.
So what you’re saying is it doesn’t matter if it’s a lie just don’t question it?
It fundamentally doesn’t add up and you can’t explain how it does yet you get upset when I say it’s overvalued.