ADB - Adelaide Bank

[Phoenix]

What do people think of this stock? I worried that the selling pressure is alot bigger then the buying. What are your thoughts?

 

[mime]

I bought this stock a couple of weeks ago. It's risen something like 7% in the past 2 day. Hope the future.

 

[Halba]

Hi Mime. Hold it for the divvies.

 

[GreatPig]

Not sure what the good news is with this one either, but I'm not complaining given that I also just bought in a couple of weeks ago as it started heading back above my trend line.

GP

 

[reece55]

Huge recovery after the half year results here, volume is up and both bars show close on near highs..... If it can get above the $14 ish barrier, there will be blue skies ahead...... Compared to it's peers, ADB is trading at a much lower valuation multiple.... the caveat here is the perceived greater risk of the assets they have on balance sheet. But IMO, ADB is certainly the pick of the banks with all others approaching very high valuations.... Best of luck to long term holders here.....

 

[Halba]

it reported good results and a good outlook

it is going to introduce new products which will add to eps

 

[nomore4s]

Good day again, closed at $14.00, tomorrow could be interesting

 

[barney]

Not often you see a bank stock rally this hard ................ can't help but think it might need a breather after such a run .............. I have a few, but fully expect some kind of retrace in the "very" near future ........ lots of gaps in the puzzle now!

 

[nomore4s]

Not often you see a bank stock rally this hard ................ can't help but think it might need a breather after such a run .............. I have a few, but fully expect some kind of retrace in the "very" near future ........ lots of gaps in the puzzle now!

That's what will make it interesting

I actually thought it was going to take a breather or even retrace a bit after yesterday when it seemed to stall abit, but it did close quite strongly.

In saying that though, I did tell my other half I thought it was going to hit $14 after the good half year figures based on where it was before the profit downgrade, but I'm fairly new & inexperienced at this, so it was more of a guess than anything else.

 

[nomore4s]

Another good couple of days, going strong at the moment

 

[barney]

Another good couple of days, going strong at the moment

Certainly has gone hard ............. My contrarian nature tells me it is starting to look like a potential short term short sell ................ (then again it might just keep bolting to $15 ) ........... There are still buyers, but losing a bit of steam late yesterday, (although friday arvo is often the reason for that). By mid next week will we should see a better picture. RSI is very overbought. Most indicators looking a bit peaked out .............. any dives could indicate a good time to take profits imo.

 

[Halba]

hi barney

no short term sell IMHO. BEN p/e 17, BOQ p/e 20 FY07 numbers. ADB p/e around 15. This will move up to 16 IMHO short term, in line and just below peers, target price $15.20

BEN growth about 12%(aspects)

ADB targets 10%, so the discount p/e is unjustified

 

[barney]

hi barney

no short term sell IMHO. BEN p/e 17, BOQ p/e 20 FY07 numbers. ADB p/e around 15. This will move up to 16 IMHO short term, in line and just below peers, target price $15.20

BEN growth about 12%(aspects)

ADB targets 10%, so the discount p/e is unjustified

Cheers Halba, My fundamentals are pretty average I admit ..... I certainly agree the stock looks strong in the longer term ....... just going purely on the "human psych" concept of a retrace after such an exponential run up. If it does drop I think it will be short term. I just think that there are so many gaps in the sp that a bounce back to low $14's (worst case scenario $13.80) before another strong run looks a possibility. The down day on Feb 7 looks like a possible pre-curser to a slight retrace, but purely speculation at this stage. All imo so to be taken with a grain of salt. Good luck to holders.

 

[mmmmining]

Why the prime taken-over target ADB is not attractive enough for BOQ?

I guess it might be because ADB and BOQ and the same kind, same sex has no attraction? (no offense to gay people)

BOQ with PE like 20, taking BEN with PE like 16, after merge, no earning dilution for BOQ. Very clever?

I am wondering ADB should take over SUN, since ADB PE like 14, and SUN PE like 12, everyone will be happy.

To be serious, does ADB has any attraction to anyone? I believe there is.

I still remember around 1996-7, people were talking about Adelaide, a dying city, losing young and bright people.

Now the booming mining industry will give the city and the State a new life. I guess ADB will benefit from it.

My prediction is ADB will join the party very soon. It is the only one moving target left..

 

[mmmmining]

Cannot believe it, both BOQ and BEN's PE is around 21;
SGB's PE around 17
MBL, NAB, CBA, and WBC's PE around 15, and
ADB, and ANZ's PE is 14.7sh
MBL has the best growth potential
Compare ADB with BOQ and BEN, there is over 40% valuation gap. Something must be wrong...

 

[mmmmining]

ADB is playing catch up game, with a takeover or without a takeover.

I am kind of believing that somehow ADB is hand in hand with the coming uranium boom in SA.

 

[reece55]

ADB is playing catch up game, with a takeover or without a takeover.

I am kind of believing that somehow ADB is hand in hand with the coming uranium boom in SA.

OK Mining, now I agree that ADB is playing a catch up game. It is also just about the only target remaining for the banking sector. It has also surged out of the trading zone it has been in for almost 2 years. All extremely good signs for the stock!

But how, exactly, is it hand in hand with the Uranium boom Adelaide?????????? I mean, realistically, the bulk of their business is interstate, they are really just a funder for loans, good at securitisation and run a typical home loan book. If they were experiencing the effects of the boom, it would be VERY VERY indrect!!!!

I am all for talking up stocks you believe in, but logical arguments please! Uranium and ADB????? HAH!

Cheers
Reece

 

[reece55]

Cannot believe it, both BOQ and BEN's PE is around 21;
SGB's PE around 17
MBL, NAB, CBA, and WBC's PE around 15, and
ADB, and ANZ's PE is 14.7sh
MBL has the best growth potential
Compare ADB with BOQ and BEN, there is over 40% valuation gap. Something must be wrong...

Something isn't wrong mate - the market is the best indication of value.

P/E's are not always the best measure of relative value either. Adelaide Bank has previously been held back due to poor earnings guidance. BEN and ADB are also very very different banks. Most risk weight ADB a bit more due to the type of loans they write, i.e. low doc loans, securitised loans, etc. That said, I think the price that BOQ are paying is something they will regret in the future - IMO you are an idiot to pay 21 times earnings for a bank!

As for MBL, there is a good reason why their P/E is low. They maintain risky as all hell assets held available for sale on their balance sheet (great when markets are good, but no so good when everything turns pear shaped). And at the moment the bulk of their income comes from commission on deals - yes, deals are great at the moment, but will this continue in the future???

As I say, P/E analysis is not a very good way at looking at value between related entities - it doesn't factor into account 1). the risk of the return occurring and most importantly 2). the rate that the underlying earnings are growing.

Cheers
Reece

 

[mmmmining]

reece55, thank you for educating me. I think it is better than my college textbook somehow. It is always good for someone to refresh my memory.

Anyway, don't like "ADB and uranium boom in SA hand in hand?" You must hate Fox News Channel.

Well, I admit I overstate a bit. But not far off though. The indirect impact of uranium boom in SA on the whole economic cannot be underestimated. I bet you understand more uranium mining, means more jobs, and more people live in SA, and more people need house, and more people need services, and more infrastructure, and big government, and so on and so on.

I don't know how big the impact is. But just have a look at Perth and WA. That is where I get my idea. Believe it or not, I thought about buying BankWest a couple of years ago only found out it is taken over by somebody.

Another example is BOQ, QLD another big mining state, so is BEN, the regional bank.

So ADB and uranium boom in SA hand in hand....

 

[FinalFantasy]

"STEP UP PREFERENCE SHARES".... dividend thing in the announcements today...

what does this step up preference share mean?

I have held ADB for a long time, so can I get this dividend?