Friday, 16 January 2009

Barclays for less than a quid

Barclay's share price was down 28 percent today. It is down 78 percent compared to a year ago.

Their price to earnings ratio is 1.9. That means if Barclays pays the same dividend to its shareholders over the next two years, as it did in last year, the share purchase would pay for it self. Just for the record, that previous comment does not constitute a recommendation to buy, sell or own Barclays stock.

10 comments:

Roy said...

short selling again.

Anonymous said...

Time for another short-selling ban then?

Zed said...

Imagine what would have happened if Barclays had bought Lehmans.

sobers said...

You've got to think that they are great value on a 3 year basis at this price? This is pricing in armageddon, economically speaking. If things don't go Mad Max on us all, then this price is going to look a steal.

But does anyone have the balls to put their money where their mouth is? Not me I'm afraid!

sps said...

The whole (Barclays') ignore the Govt. was a bluff.

How was their annual bonus?

Andy said...

LONDON , Jan 16 (Reuters) - Britain's Barclays Plc (BARC.L) said on Friday it knew of no justification for the big fall in its share price and it expects next month to report pretax profit for the year "well ahead" of analysts' estimates.

In a statement issued after the bank's shares closed down 24.85 percent, it said: "The board of Barclays knows no justification for the fall in the share price.

"Barclays will announce full results for the year ended Dec. 31, 2008 on Feb. 17, 2009.

"The board of Barclays expects to report profit before tax for the year, after reflecting all costs, impairment and market valuations, well ahead of the 5,300 million pounds ($7.91 billion) consensus estimate of sell-side analysts."

The bank added: "Further, Barclays expects to report a year-end equity tier one capital ratio and tier one capital ratio, on a pro forma basis reflecting the conversion of the Mandatorily Convertible Notes, of approximately 6.5 percent and 9.5 percent respectively."

Earlier on Friday, Barclays shares in London had closed down almost 25 percent at 98 pence, their lowest level since 1993.

Several traders could not identify a specific reason for the late slide by Barclays or other British banking stocks, but cited several rumors including worries about the impact of a UK rescue plan being discussed, executive departures, writedowns and capital. ($1=.6704 Pound) (Reporting by Peter Griffiths, editing by Gerald E. McCormick)

Anonymous said...

Possibly they are worried that BARCL will be FORCED to take government capital....

aSteve said...

Of course, a P/E ratio of 1.9 is bonkers... but there are two measured quantities... price and earnings forecast.

I'm reasonably confident that their price reflects market opinion - which leads me to conclude that the earnings forecast is fiction.

As I remember it, last year, Barclays was the bank suggesting that all its assets' values were unaffected. I thought that sounded amusing at the time. Of course, it's good to know that Barclays managed to pay out its 2008 Christmas bonuses... which would have been in jeopardy if it had been forced to take government capital before 2009.

Anonymous said...

The banks are bust, and have been for ages: they spent all your savings and more on worthless shacks in Alabama, and paid themselves vast commissions on the CDO's. What's the story?

B. in C.

Anonymous said...

The reason Barclays told the Government to get lost over a bailout was because a significant fraction of Barclays' business was and will continue to be helping companies dodge tax. Had Barclays taken the Government shilling, all that tax dodging would have had to stop, and having faster footwork than a cat on amphetamines is really Barclays' sole selling point.

So, had they taken the bailout, they'd be down in the mire with all the other cheap-ass lenders, but as they are they're still able to do an Arthur Daley routine, which as everyone knows is the best tactic for dealing with Socialist governments, as these always develop festeringly byzantine tax codes.

The future is that unless the UK Government gets wise fast and cuts away a lot of Government waste, the tax code will simply develop to the point of insanity, and the population will consider the Government little better than thieving scum, and do their best to dodge any attempt at taxation. The best early warning for this is the increasing use of intrinsic-value coinage and barter over inflation-prone paper money.