Result was weak underlying. Driven more by a reduction on doubtful debts. Net interest margin fell. UK not being sold quickly. Dividend not above expectations. Take your pick.
NAB - National Australia Bank
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Result was weak underlying. Driven more by a reduction on doubtful debts. Net interest margin fell. UK not being sold quickly. Dividend not above expectations. Take your pick.
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You don't have to get it.
It is the net effect of a group of diverse people.
Some are rational, some not!
Some are emotional, some not!
Ask yourself what have you got riding on this.
Can you afford to be wrong?
"The trend is your friend until the bend at the end." anon.
Your mission should you choose to accept it:
Find out if this is truly the bend at the end or just a small kink in the middle?
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When I go to the barber, I look like a prospector!
But when I emerge I look like a million dollars!
:
tinhat
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This is a pick.
I bought my NAB shares in March and May this year. Pity I didn't wait until June. While capital growth would be nice, the grossed up yield of 8.5% on an av price of $30.50 is what I am after.
Whiskers
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What does "reduction on doubtful debts" mean... tighter lending policy or has there been a heavy culling of doubtful debts?
I'm curious what the objective of their strategy of being the lowest variable rate mortgage for the last year is. Are they anticipating the market to rise and increase their variable rates faster... or not lower as much aside from the RBA as some expect in the next year or two, now that they have more mortgages locked in!
Hi everyone, I am new to this forum but I have been trading about 8 years already in the European stock markets. As I relocated to AU recently my trading preferences also turned to a local market. I using mostly a Wave Principle for analysis as I have a sound understanding how markets operate under it. I apologize for my grammar in advance, thanks.
I already have NAB, BEN, SGP, WES, WOW, IEM, TLS, SUN in my portfolio and looking to buy some more blue chip stocks that pay ~5% dividend and have an upward trending long term wave structure.
Average size of position is no less than 10K aud.
NAB is already 10 months trending sideways and there is a strong probability that the correction bottom has been set a couple weeks ago at 32.24. Since then series of first and second waves is developing and I expect it to move strongly up in the coming week or so.
If you take a look on the weekly chart it looks like the last sideways movement fits into paralel channells and there is one wave missing to complete a "five" from 19 Sept 2011 ortdox low of Intermediate Wave (B). The RSI under the graph is still into a correction mode and no Buy signal has been generated yet, but if an Impulse Wave 5 has started, a few more weekly bars up would generate one and price should start rising Impulsively towards 42-44 area in the comming months.
There is still a possibility that the larger size Triangle is developing, in this way RSI will stay under the line on weekly and stock will not rise above 35,50. But both ways short term trend is up and I personaly think it is worth bying at this stage.
If you look at an hourly chart there apears to be a series of first and second waves developing, which means the stock is accelerating upwards and the "gap and go" move is ahead.
I already have NAB, BEN, SGP, WES, WOW, IEM, TLS, SUN in my portfolio and looking to buy some more blue chip stocks that pay ~5% dividend and have an upward trending long term wave structure.
Average size of position is no less than 10K aud.
NAB is already 10 months trending sideways and there is a strong probability that the correction bottom has been set a couple weeks ago at 32.24. Since then series of first and second waves is developing and I expect it to move strongly up in the coming week or so.
If you take a look on the weekly chart it looks like the last sideways movement fits into paralel channells and there is one wave missing to complete a "five" from 19 Sept 2011 ortdox low of Intermediate Wave (B). The RSI under the graph is still into a correction mode and no Buy signal has been generated yet, but if an Impulse Wave 5 has started, a few more weekly bars up would generate one and price should start rising Impulsively towards 42-44 area in the comming months.
There is still a possibility that the larger size Triangle is developing, in this way RSI will stay under the line on weekly and stock will not rise above 35,50. But both ways short term trend is up and I personaly think it is worth bying at this stage.
If you look at an hourly chart there apears to be a series of first and second waves developing, which means the stock is accelerating upwards and the "gap and go" move is ahead.
Welcome rimtas and thank you for the detailed post and analysis. I am in agreement with you, I do believe NAB is well placed to outperform the other major banks in the medium term. It remains inexpensive on the valuation metrics I use whereas the other banks are what I would consider to be fair value to slightly expensive. Some discount to the other majors is justified due to the capital NAB has tied up in its underperforming UK division, but the current level of discount is too high, in my humble opinion. I too am long NAB.
Julia
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I, too.
Recent Update...
Looks like NAB was unable to break upwards above $35,50 and the weekly RSI line tells that market is still in a Correction mode. The Triangle scenario gains more probability at this stage unless NAB will break out of the Triangle brackets above $35,50.
If the last wave down is developing, a $32,30 level should be a strong resistance and the weekly bar should not close below it.
Looks like NAB was unable to break upwards above $35,50 and the weekly RSI line tells that market is still in a Correction mode. The Triangle scenario gains more probability at this stage unless NAB will break out of the Triangle brackets above $35,50.
If the last wave down is developing, a $32,30 level should be a strong resistance and the weekly bar should not close below it.
Still shy of 32.30 E Wave target, probably will climb a little and then drop in a few weeks. I'll post a chart when/if a good entry scenario realizes.
In a perfect world 32,30 is a buy with a stop just below 32 where the entire Triangle would desintegrate and the bearish count would come into efect.
Let's wait and see what more Wave E brings, it should subdivide into 3 waves, we have just 1 down from Wave D top so far... In a rear cases the Entire E Wave is a Triangle, but NAB is already oversold on a weekly basis so this scenario has a low probability.
In a perfect world 32,30 is a buy with a stop just below 32 where the entire Triangle would desintegrate and the bearish count would come into efect.
Let's wait and see what more Wave E brings, it should subdivide into 3 waves, we have just 1 down from Wave D top so far... In a rear cases the Entire E Wave is a Triangle, but NAB is already oversold on a weekly basis so this scenario has a low probability.
The recent fall in bank stocks has in my view been driven primarily by offshore investment funds exiting large cap yield exposures as their performance gets hit by the falling Aussie dollar. NAB now appears good value based on my valuation and offers a grossed up forecast dividend yield in excess of 9%. There are more "easy" wins for NAB in the medium term when compared with the other banks - for example, exiting the UK and US are key milestones which may help drive a re-rate. In the meantime we can sit back and enjoy the yield.
Disclosure: I am long NAB.
Disclosure: I am long NAB.
Julia
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Thanks, coolcup. I see it similarly. But I only have a relatively small amount invested at present.
If I were fully invested right now, I'd be out.
That is perhaps more a reflection of my conservative stance than any sort of prediction about what will happen from here. Just rather too many disquieting factors at present.
If I were fully invested right now, I'd be out.
That is perhaps more a reflection of my conservative stance than any sort of prediction about what will happen from here. Just rather too many disquieting factors at present.
Julia,
I tend to agree with Coolcup but I would be interested to hear where you feel investment would be more comfortably placed if you don't mind discussing it.
cheers
Julia
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Ian, we'll have different views based on our circumstances. My focus is on preservation of capital. So if I'm at all fearful of eg GFC MK2 I will want to preserve most of my profits. It worked well for me when the GFC occurred.
Some people took the view "why sell? you're still getting your dividends and franking credits." OK, but if things get bad enough those dividends are not guaranteed either. And if you needed that invested capital for anything, at the bottom you had 50% less of it than pre GFC. I'm not up for that sort of risk.
A big difference between then and now is that the GFC was accompanied by a credit squeeze which forced the banks to offer pretty high interest rates eg 8%.
If one isn't paying tax then that's an acceptable enough place to park money while the market falls.
We're all very aware that now, about six years later, the market is still some distance from regaining its pre GFC level of about 6800. Nonetheless, those who bought back in when an uptrend returned have done pretty well.
Interest rates now are unattractive, so there are fewer options.
I'm not sure if this answers your question. Others will take a different view.
If you are not dependent on your capital generating an income to live on, then you're going to have a different focus from someone who has no other source of income than that generated from capital.
Some people took the view "why sell? you're still getting your dividends and franking credits." OK, but if things get bad enough those dividends are not guaranteed either. And if you needed that invested capital for anything, at the bottom you had 50% less of it than pre GFC. I'm not up for that sort of risk.
A big difference between then and now is that the GFC was accompanied by a credit squeeze which forced the banks to offer pretty high interest rates eg 8%.
If one isn't paying tax then that's an acceptable enough place to park money while the market falls.
We're all very aware that now, about six years later, the market is still some distance from regaining its pre GFC level of about 6800. Nonetheless, those who bought back in when an uptrend returned have done pretty well.
Interest rates now are unattractive, so there are fewer options.
I'm not sure if this answers your question. Others will take a different view.
If you are not dependent on your capital generating an income to live on, then you're going to have a different focus from someone who has no other source of income than that generated from capital.
Hi Julia
Would you mind sharing some of these factors? Just to make sure I am not missing anything in my own thinking!!
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The chase for yield has caused many companies within the index to return large amounts of capital to shareholders through dividends and other means since the GFC...so I think that the Accumulation Index is a better projection of what has actually occurred since the plunge.
Agree with you that investors in different stages of their journey will have different preferences for the amount of equity market risk they are willing to accept.
In my view it's my job to buy good businesses at less than I think they are worth. If I become unable to trust my ability in my attempts to analyse and value these businesses - then I allocate my equity exposure to a low cost index fund which will remain invested at all times. If I cannot value single businesses, I find it hard to believe that I can time the direction of the market in order to avoid the corrections and cash in on the big runs...
Funnily enough, I'd say that quite a few good businesses would have been qualifying for sells based on exceeding valuations in the period leading up to the GFC, where exuberance of other market participants caused you to take your risk off the table. So perhaps the outcome is largely the same, just the methodology is somewhat different.
Of course this is just my view...don't expect everyone to agree with me.
I think probably a year or so before the GFC hit, share prices were well above sensible fundamental valuations. While an investor might have been disciplined and sold at that point, it takes a lot of discipline and self-confidence to continue to believe / trust in your own fundamental valuation after you have sold and when the market continues to run for a year or more. Your valuation says the market is getting even more over-priced but the herd is saying "look at the returns you are missing out on". It takes a lot of discipline and patience.
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