RE: Lloyds value25 Jan 2024 10:20
Apparently it's the company's fault the share price isn't higher?! The company has delivered a huge increase in profits and bought back £billions of shares. What more do you expect them to do? The share price is dictated by the market - buyers and sellers. It's completely out of their hands what the share price is doing! Market cap is whatever the market decides - the company has zero control over it. And market cap can, and often does, become massively out of kilter with the true underlying value. In the case of ocado years ago, the company wasn't even making a profit and yet it's market cap was in the £multi billions! Lloyds is at the other end of the spectrum - huge buy back, massive increase in profits and market cap has actually gone down! All this says, or should be saying to investors is just how undervalued the stock is right now. Sentiment plays a heavy part in share price movement - rather than blaming the company, I do think sentiment is the main culprit as to why the price isn't much higher. Maybe it's Brexit, possibly the long recovery from COVID, interest rates, inflation, worries over Ukraine and the middle east - none of these things the company can do anything about, but all of them affect sentiment. Warren Buffet once said you don't buy a farm then check the valuation every day - similarly with a house, valuations go up and down all the time but you don't worry about it. Odd then that when you buy a company your main concern is the valuation rather than seeing your investment as a long term asset, just like the farm or house. All i would say is there's a lot of gloom in the world right now and I do think it's all too easy to point the finger of blame at the company when the share price isn't perhaps doing what you hoped it would. If the war in Ukraine was suddenly over, if inflation came down, interest rates came down and positivity really started to return to the markets i think we all know Lloyds would move significantly higher along with the rest of the FTSE.