Financials

[Ken]

Hi,

I am wondering how investors are looking at financials at the moment.

Stocks I am watching are:

AFG
BNB
MBL
NAB
MFS
PPT

MBL is expected to produce a record profit.

NAB is expected to pay an 80 cent dividend in a month.

AFG is trading with a dividend yield of over 6%.

At some point do the fundamentals come into play like to play like they did when BHP was $24 for some time, and RIO was $70? They hovered around these levels for a while when copper prices were falling but all in all they were still trading on low PE levels.

Are the financials getting to that stage now?

The dividends are looking juicy, and earnings per share are still going strong.

I believe NAB is a $50 share, AFG is a $9 to $10 share, and MBL is a $100 share given time!

Anyone else agree disagree?

I really believe after the volatility financials will run again.

The fed cutting rates could kick this off again and end the downwards slide.

Long term 5 years where do investors see these financials?

Long term trends would say they are worth looking at.

 

[vishalt]

ehhh the only financial I trust is BNB, they buy better assets and have what it takes to beat Macquarie Bank. Awesome management too.

Why would you pick NAB? It's $38 at the moment, its been the worst performing bank since the start of this century with all the international hassles, and 80c dividend is quite poor.. St George will probably give 90-95c and that stock is only almost $33.

PPT is looking quite nice I must say, the funds its managing are doing quite well, the stock isn't getting reamed too hard (still in the 70's range) and its dividends are exhorbrent as usual!

 

[Fab]

Hi,

I am wondering how investors are looking at financials at the moment.

Stocks I am watching are:

AFG
BNB
MBL
NAB
MFS
PPT

MBL is expected to produce a record profit.

NAB is expected to pay an 80 cent dividend in a month.

AFG is trading with a dividend yield of over 6%.

At some point do the fundamentals come into play like to play like they did when BHP was $24 for some time, and RIO was $70? They hovered around these levels for a while when copper prices were falling but all in all they were still trading on low PE levels.

Are the financials getting to that stage now?

The dividends are looking juicy, and earnings per share are still going strong.

I believe NAB is a $50 share, AFG is a $9 to $10 share, and MBL is a $100 share given time!

Anyone else agree disagree?

I really believe after the volatility financials will run again.

The fed cutting rates could kick this off again and end the downwards slide.

Long term 5 years where do investors see these financials?

Long term trends would say they are worth looking at.

When is MBL reporting due ? It has been going down heavily in the last 2 days but recommendations from brokers remains at $110. There is still a lot of upside in this share

 

[Julia]

Ken, the yield on AFG looks good at present because the SP has fallen so far.
I sold mine, having bought it as Record Investments at around $4.
It has basically gone nowhere all year. Same can be said of NAB and MFS, and I don't know about the others, except MBL which has at least done a good run up before falling back in response to the credit squeeze concerns.

In the long term, I agree with you, but don't think the bad times for financials will be over for a while yet.

 

[Ken]

AFG up 8%
NAB up 2.55 %
MBL up 5.1 %
MFS up 4%

Overall market up not that much.

BHP up 4.46 %.

Resources continue their charge.

BHP could see 100% price in 12 months at this rate, and this is from Australia's biggest Company!

Financials I think will be re-rated, but any sign of sub-prime issues look out again.

AFG is the highest risk play in my opinion as it is not a heavy one for super funds.

And I like NAB for your very point, it has underperformed historically. When/if they get it right, I believe they will outperform other banks as far as share price returns go. I see NAB as a $50 stock in 2 years.

 

[Fab]

AFG up 8%
NAB up 2.55 %
MBL up 5.1 %
MFS up 4%

Overall market up not that much.

BHP up 4.46 %.

Resources continue their charge.

BHP could see 100% price in 12 months at this rate, and this is from Australia's biggest Company!

Financials I think will be re-rated, but any sign of sub-prime issues look out again.

AFG is the highest risk play in my opinion as it is not a heavy one for super funds.

And I like NAB for your very point, it has underperformed historically. When/if they get it right, I believe they will outperform other banks as far as share price returns go. I see NAB as a $50 stock in 2 years.

When is MBL due to report its financial result? Or has it happened yet?

 

[michael_selway]

AFG up 8%
NAB up 2.55 %
MBL up 5.1 %
MFS up 4%

Overall market up not that much.

BHP up 4.46 %.

Resources continue their charge.

BHP could see 100% price in 12 months at this rate, and this is from Australia's biggest Company!

Financials I think will be re-rated, but any sign of sub-prime issues look out again.

AFG is the highest risk play in my opinion as it is not a heavy one for super funds.

And I like NAB for your very point, it has underperformed historically. When/if they get it right, I believe they will outperform other banks as far as share price returns go. I see NAB as a $50 stock in 2 years.

Really you think AFG is the most riskiest?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 63.9 76.5 92.5 106.1
DPS 44.0 44.0 46.5 52.0

thx

MS

 

[dhukka]

When is MBL due to report its financial result? Or has it happened yet?

Fab,

MBL is a March year end company. You'll get 1H08 results in November which is expected to be a bumper. However of more importance will be the outlook for the 2nd half of the financial year.

 

[Ken]

I think in terms of profit and loss for shareholders AFG is more volatile in the way it trades.

The swings are bigger, and it is the only financial out of the group thats made a poor recovery.

 

[Ken]

Also worth noting Tabcorp.

After the horse flu in the media... TAH sank to $14.72.

No horse flu in media.... TAH back to $15.70 high today...

Interesting how people forget.

I believe that when and if resources run out of puff.. and they will pause at some point. Investors will look to put money into more defensive stocks. This is where a lot of the banks come into play.

Banks are defensive right???

Just my opinion.

Banks may go side ways for next 6 to 12 months.... but in 10 years history says stocks in top 50 will have doubled or been taken over.

 

[Ken]

Well my gut instict has paid off.

Financials were oversold and resources were over bought.

NAB up
AFG up
MBL up
BNB up
MFS up

Good gains in a week.

My signal for the turn around was that the liquidity would improve in this sector due to rate cuts.

Short term I took this as a sign to enter into the banks, and investment banking sector.

Maybe a bit of luck, but I wouldnt consider it luck as I bought the sector, and the fundamentally undervalued companies.

Only problem was I didnt buy enough.... which is everyones problem when stocks rise 10-15%+

 

[doctorj]

Financials were oversold and resources were over bought.

Really? Here's a 10 day chart (you first posted 9 days ago I think) of BHP vs NAB.

 

[Ken]

Yeah I think so.

NAB had not staged a recovery since august 10.

The reason the market has reached all time highs is because the financials are playing catch up at the moment.

Look at NAB, MBL, AFG.

Financials are catching up to resources.

Your defensive plays like TAH, TLS, and any other defensive yield play stocks will most likely get sold down as confidence returns to the markets.

When confidence gets too high and the growth stocks take a breather its back to the defensive stocks.

This is why diversification is great in long term portfolios

Resources are not going to be great for 40 years straight, so you do need a bit of both.

That is unless you monitor your stocks daily, weekly, or monthly then you can pick short term trends.

Financials recovering good news for all ords to head higher.