Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
I think some of the best shares to buy now are located in the financial sector. As the UK economy recovers from the pandemic, I think this sector will benefit substantially from increased economic activity. And with that in mind, here are three FTSE 100 bargains I would add to my portfolio today.
Best shares to buy now
The first company is the asset management and insurance group M&G (LSE: MNG).
This company effectively comprises the bulk of insurer Prudential‘s UK operation. This is predominantly an asset management business with a legacy insurance division.
The asset management business was hit hard last year when the pandemic struck. However, rising asset prices have helped the segment recently. As the UK economy recovers, I think this trend will continue.
One of the things I really like about this business is its valuation. The stock is currently dealing at a price-to-earnings (P/E) ratio of 9.4. I think that looks cheap compared to the market average of around 14.
This valuation is the primary reason I would add M&G to my portfolio FTSE 100 stocks. The main risks and challenges facing the group are the potential for another market sell-off, which could hit asset values and profits, and rising competition in the asset management sector.
Splitting up the business
I would also buy FTSE 100 insurance group Aviva (LSE: AV) for my FTSE 100 recovery stocks portfolio.
Over the past few years, this company has fallen out of favour with the market due to a lack of strategy. That is changing. The new management has been selling off divisions and refocusing the business on its core operations.
By freeing up capital from overseas operations, I think the company should be able to invest in its UK division just at the right time, when the economy is recovering from the pandemic. This growth potential is the main reason why I would buy the insurer for my portfolio.
The main risk facing the group is the potential for a significant increase in interest rates. As a life insurance company, this could substantially increase the firm’s liabilities, which could have a devastating impact on its bottom line.
FTSE 100 stock
The final company I would buy for my FTSE 100 recovery stocks portfolio is the banking giant Barclays (LSE: BARC).
The group’s investment bank helped it weather the worst of the crisis, and its retail bank should help drive growth as we advance. An improving economy should lead to higher loan demand and lower loan losses. This would allow Barclays to increase its profitability.
The bank has also benefited from lower than expected loan write-offs during the pandemic. Its balance sheet is stronger as a result, with the capital ratio coming in at 14.6% at the end of the first quarter. This was slightly above management’s targeted range.
Despite the bank’s improving outlook, it still faces some big challenges though. Another wave of coronavirus could inflict significant loan losses on the group. In addit
https://uk.finance.yahoo.com/news/heres-why-think-barclays-lon-022658470.html
While "the trend is your friend" when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of success by making sure the sustainability of a trend isn't easy.
Often, the direction of a stock's price movement reverses quickly after taking a position in it, making investors incur a short-term capital loss. So, it's important to ensure that there are enough factors -- such as sound fundamentals, positive earnings estimate revisions, etc. -- that could keep the momentum in the stock going.
Our "Recent Price Strength" screen, which is created on a unique short-term trading strategy, could be pretty useful in this regard. This predefined screen makes it really easy to shortlist the stocks that have enough fundamental strength to maintain their recent uptrend. Also, the screen passes only the stocks that are trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.
Barclays (BCS) is one of the several suitable candidates that passed through the screen. Here are the key reasons why it could be a profitable bet for "trend" investors.
A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. BCS is quite a good fit in this regard, gaining 29.9% over this period.
However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 1.5% over the past four weeks ensures that the trend is still in place for the stock of this financial holding company.
Moreover, BCS is currently trading at 97.4% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.
Looking at the fundamentals, the stock currently carries a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.
So, the price trend in BCS may not reverse anytime soon.
In addition to BCS, there are several other stocks that currently pass through our "Rec
Amanda Staveley's PCP firm was not 'credible', says ex-Barclays boss John Varley
FORMER Barclays chief executive John Varley today sought to hurt the credibility of Amanda Staveley in her £1.5 billion court battle with the bank.
The financier, also trying to secure a deal to take over Newcastle United, thinks she was locked out of a 2008 deal with Qatar that secured Barclays' finances at a time of great turmoil.
The bank says she was a mere introducer. Staveley says her PCP syndicate was an investor and should have benefited from the deal.
Today in a court statement Varley, chief executive between 2004 and 2010, said Barclays was seeking investors with "deep pockets", "instant credibility and name recognition" who were "acceptable to the FSA".
PCP "would not have fulfilled the criteria", he said.
Barclays and Varley had meetings with the FSA - the Financial Services Authority, now the Financial Conduct Authority - to discuss its fundraiser.
Varley said: "At no time did I approach or could I credibly have the FSA to seek its consent to PCP...becoming a source, by investment, of the continuing independence of a systemically important bank."
Mr Justice Waksman began overseeing the trial two weeks ago. It is likely to last two months.
Barclays' lawyers said earlier that Staveley, a sometime girlfriend of Prince Andrew, had tried to "insert" herself into a deal in a "hustle".
Last week, the Press Association reported, Staveley burst into tears at this claim.
An earlier fraud trial into the £4 billion Qatar investment cleared former Barclays bosses of wrongdoing.?
https://uk.finance.yahoo.com/news/brokers-bullish-barclays-shares-081921141.html
STOCKS TO WATCH
The World Economy Is Turning a Corner. It’s Time To Get Picky On Stocks, Barclays Says
Barclays argues that long-underperforming European stocks may outperform U.S. equities.
While a fast and furious V-shaped bounce from one of the worst global recessions in decades is not in the cards, investors can still expect a faster recovery than those downturns of the past.
So say Ajay Rajadhyaksha and a team of Barclays strategists, who credit that hopeful outlook to central bankers keeping the stimulus flowing. For investors, that means risk assets should keep outperforming core bonds—but it is time to get selective, with stocks trading near highs and valuations elevated.
Barclays’ Maneesh Deshpande says the best equity bet right now favors Europe over the U.S. Their end-year forecast for the S&P 500 is 2800, and 370 for the Stoxx Europe 600. In light of Thursday’s losses driven by disappointing jobs data, that looks like a roughly 10% drop for the S&P and a 2% gain for European stocks.
“It would appear the initial bounce phase has passed ...market returns will be less remarkable as the world adjusts to its new lower-growth reality,” said Despande. While European stocks have persistently underperformed the U.S. since 2009, the risk-reward for Wall Street simply looks less attractive. Barclays also worries that “some of the drivers of the secular U.S. outperformance could be challenged.”
For Europe, they recommend a so-called barbell approach, which will provide a potential benefit from a cyclical recovery, but some backup in case of surging tail risks. They suggest an overweight of cyclicals versus defensives, with industrials and mining stocks the top plays within that.
Barclays also likes financials, which are a dominating sector in Europe, along with technology—for digitalization—and utilities on the theme of decarbonization. On the downside, they recommend skipping energy, staples, and telecoms.
As for the U.S., they break stocks into three buckets. First is the medium-term impaired, such as hotels and airlines; the “resilient” stocks who are thriving via e-commerce-oriented business models; and then the rest.
“We think investing in the ‘impaired’ stocks, which are mainly in the consume discretionary sector, is quite risky and hence do not recommend them,” the strategists said. In the overweight category, they continue to keep top tech stocks—alongside industrials and health care.
https://seekingalpha.com/article/4352404-barclays-q2-outlook-bullish-signal
David Cumming, chief investment officer for equities at Aviva Investors, declared that the bear market is over and said the FTSE 100 will not collapse below the 5,000 mark again this year after a strong rally.
Cumming, who oversees the nest eggs of savers for insurer Aviva's £346billion asset management arm, told The Mail on Sunday: 'I'm not one of these people who think we will re-test the lows.
The bear market is over. In my view we are not going back below 5,000.
'There might be a little bit of a pause and there are still things that could go wrong...but I think the stock market will be higher by the end of the year.'
The FTSE 100 has rallied almost 30 per cent since it crashed to just below 5,000 in mid-March.
Cumming said some banking shares, including Barclays and Standard Chartered, still look cheap.
He acknowledged that the rally could turn into another slump, especially if Donald Trump incites a trade war with China to gain popularity ahead of the US Presidential election, but he said he was optimistic about the prospects for UK-listed shares.
However, some hedge funds are betting that the stock market gains are a flash in the pan of a long bear market in which shares will keep falling.
Brokers bullish on Barclays shareshttps://uk.finance.yahoo.com/news/brokers-bullish-barclays-shares-132156849.html
Is Barclays (BCS)a profitably stock to pick right now
https://finance.yahoo.com/news/barclays-bcs-profitable-stock-pick-134001048.html
Get Ready For A V-Shaped Recovery In The Economy
The equity markets put in a bottom on March 23 of this year.
Bottom deniers would need to see the DJIA drop below 18,200 in the near future.
The market is now up more than 30% from the bottom it put in five weeks ago.
A new bull market is now underway.
The market is predicting a V-Shaped recovery in the U.S. economy.
https://finance.yahoo.com/news/barclays-traders-lead-wall-street-132514206.html
Barclays (LON:BARC) will be releasing its Q1 earnings before the market opens on Wednesday, April 29, Digital Look Earnings reports.
Barclays (LON:BARC) had its "buy" rating reaffirmed by analysts at Shore Capital (Not Ranked).
Barclays (LON:BARC) was given a new GBX 150 ($1.97) price target on by analysts at UBS Group AG (star star star star blank star). They now have a "buy" rating on the stock.
Barclays (LON:BARC) was given a new GBX 180 ($2.37) price target on by analysts at JPMorgan Chase & Co. (star star star star blank star). They now have a "buy" rating on the stock.
(4/29) Covid-19 loan losses weigh on Barclays in record sales and trading quarter - Financial News (fnlondon.com)
The Barclays share price is up almost 6% this morning, despite reporting a 38% drop in first-quarter profits to £913m. Barclays (LSE: BARC) also set aside £2.1bn to cover bad debts during the coronavirus crisis, against just £448m a year earlier.
In normal times, the FTSE 100 bank would be sharply down, but times are far from normal. Investors prefer to focus on the positives. In this case, a 20% rise in revenue to £6.3bn. The Barclays share price is down more than 40% from its January highs, and looks a tempting long-term buy for bargain hunters.
But there are plenty of reasons to be cautious. First, the dividend has gone, and we don’t know when it’ll be back. That wasn’t even the board’s decision. The Prudential Regulatory Authority pressured banks to focus their financial power on bailing Britain out of the Covid-19 crisis.
Bargain FTSE 100 stock
That means there’s no income stream while you wait for the UK economy — and Barclays share price — to recover.
Today, the board warned of a tough year, but we knew that, didn’t we? Near-zero interest rates will cost its UK retail business around £250m. Meanwhile, a regulatory clampdown on fees and overdrafts will cost another £150m.
Although profits at its international business fell from £1.1bn to £800m, there was good news here, as investment bank income rose 44% to £3.6bn. Traders have been taking advantage of stock market volatility, and April should be even better. This is one in the eye for activist investor Ed Bramson, who’s been pushing Barclays CEO Jes Staley to dump the investment bank.
I’d buy the Barclays share price
Today, Staley warned of a “challenging” year, which is an understatement. But he hailed the bank’s “diversification by business, geography and currency, which allows us to remain resilient through the developing economic downturn.”
Barclays’ common equity tier 1 capital ratio shrank from 13.8% to 13.1%, but is still above the bank’s 11.5% minimum regulatory hurdle.
The Barclays share price looks a bargain by conventional valuation methods, with a price-to-book valuation of just 0.3. However, these aren’t conventional times. The banks are also under political pressure to be lenient on bad debts.
Long-term buy-and-hold
The road to recovery will be long and the dividend has gone, at least until the end of the year, when management will review its position.
I think every portfolio has a place for Barclays, so why not buy it when the share price is down. The bank is also benefiting from the crisis, with increased trading income, and a surge in corporate lending to locked-down companies keen to boost liquidity.
The next leg of the Barclays share price recovery may take time, but I still think it’s a tempting long-term buy-and-hold today.
It has been a tough start to the year for Barclays (LSE:BARC) CEO James “Jes” Staley. Forced to publicly discuss unfortunate links with convicted sex offender Jeffrey Epstein, the Barclays share price has also crashed. However, I think the share price will rebound in the long term if the company is successful in the following areas.
Weathering Covid-19
Whilst the Barclays share price is now at levels not seen since 2009, the bank is much better capitalised than it was in 2009. In order to assess this, I look at its Common Equity Tier 1 Ratio (CET1). This roughly translates to the amount of capital it has to absorb potential losses from its risk-weighted assets. It now stands at 13.8%, compared with just 5.6% in 2008. This will help Barclays cover £1bn worth of bad loans expected from the crisis. Combined with the UK government’s furlough scheme and pulling its latest dividend, I believe this should enable the bank to survive.
It is also worth noting that unlike the 2008 crisis, this is not a banking crisis. With Staley and other senior management waiving pay increases, I don’t think banks will re-emerge as public enemy number one. Therefore, a potential legacy of fines and drop in demand for its products should be avoided.
Consumer banking
The consumer bank primarily drives group income, accounting for 47% in 2019 (£10.2bn). A much-publicised threat in this industry comes from challenger banks, such as Monzo and Metro Bank. However, increasingly, Barclays and the other big consumer banks appear to be winning this fight. Indeed, the top six banks now hold 87% of personal accounts, up from 80% in 2000.
I think there’s two key reasons why.
Regulation: consumer banking is a highly regulated industry that favours the big players who can afford to comply with these regulations.
Digitalisation: technologically the big players are catching up with the challenger banks. Barclays has made becoming more digital one of its four strategic pillars, with the number of digitally active customers up by 6%.
This should ensure Barclays at least retains its market share.
Investment banking
35% of the group’s income, investment banking is also crucial to long-term success. Again, in an industry where brand name and relationships are key, I do not see Barclays’ market share deteriorating. In fact, since 2017 Barclays has achieved nine times the market share gain of the next best European bank. This has elevated it to the sixth largest by fee income globally.
As alluded to above, Barclays’ group 2019 results were very strong, beating analysts’ estimates. Earnings were up 9% versus 2018 thanks to higher revenues and lower operating costs. Therefore, I believe that whilst the Barclays share price has dropped due to Covid-19 and speculation surrounding the CEO, the business is still fundamentally sound and, at a price-to-earnings ratio of just 6.4, a bargain buy.
Barclays (LSE: BARC) shares have dived over the past month. Shares in the bank are down around 44% since the beginning of the year.
After these declines, the Barclays share price is now back where it was in the dark days of the financial crisis.
The big question is, does this mean investors should rush to buy the stock?
Time to buy Barclays shares?
Barclays shares might look cheap compared to history. But it’s the company’s fundamental value that’s more important. The share price is only a number and is not a guide to the health of the business.
So, what are Barclays’ underlying fundamentals like? Well, the business is much stronger today than it was in 2009. The bank has spent the past decade shedding non-core assets and building its cash reserves.
Barclays’ fully loaded common equity Tier 1 ratio, a measure of its highest-quality capital, was 13.8% at the end of 2019. That’s above management’s minimum of 13.5%. At the end of 2008, the ratio was just 5.6%.
In other words, Barclays’ balance sheet is solid.
Its capital ratio isn’t the only factor depressing the Barclays share price.
Low interest rates are also weighing on the group’s profitability. The Bank of England’s decision to slash rates to a record will have a significant impact on earnings going forward because Barclays’ profitably is determined by its net interest margin. Put simply this is the gap between the rate the bank can pay to depositors and charge borrowers.
Then there’s the potential fallout from the shutdown of the UK economy. Even though the government is doing everything it can to help businesses, lenders and borrowers, there will be some casualties. Barclays may have to take losses on some loans as a result.
Looks cheap
Still, despite all of the above, Barclays shares look cheap to me.
The stock is trading at a price-to-book (P/B) ratio of just 0.3. That implies that if the bank were broken up and sold, it would be worth 200% more than its current market value.
This implies that the stock offers a wide margin of safety at current levels. Indeed, while the lender might see a decline in profits due to the current situation, it is unlikely to collapse.
Policymakers both here in the UK and US have done everything possible to minimise the risk of a bank failure, and it looks as if they’re prepared to go a lot further if needs be.
As such, now could be a good time for risk-tolerant investors to buy Barclays shares. It might be some time before the UK economy opens up again, but when it does, and confidence returns, the stock’s current valuation suggests the shares could double or even triple from current levels.