Barclays Bank PLC ADR 2

On my new blog of Investing, Economics Mostly and I have today commented on the Where is retirement going?

I own this stock (NYSE:BCS, LSE-BARC). I bought this stock in March 2000. I have in a US$ account. My gain in US$ is 2.4% per year. I got 6.3% per year in dividends. If I look at US$ to CDN$ changes over the same period of time, I have lost 3.1% because of the differences in the exchange rate. So really I am down some 0.7% per year. So really I have not gained anything, but I really have not lost or not lost much.

A report dated April 12th says that there has been no insider selling or insider buying over past 6 months. One analyst said that institutions only hold 2.4% of the outstanding shares and the average institutional ownership of Regional Banks is 37.5%, which is also lower than S&P 500 as a whole which is 70.5% institutional ownership. It is hard to get institutional ownership information on this bank. The above seems to be only for NYSE ADRs for this bank.

I get 5 year median low and high Price/Earnings Ratios of 5.75 and 12.95. The current P/E Ratio is 6.47, which would suggest a low stock price. These P/E ratios are low and have been quite low lately.

I get a Graham Price of $36.53. The 10 year low median difference between the Graham Price and stock price is the stock price being 36% lower than the Graham Price. Currently the stock price is some 63% below the stock price. This would suggest a very low stock price.

However, the 5 year low difference between the Graham Price and stock price is the stock price being some 72% lower than the Graham Price. Between 2007 and 2009, the stock price fell some 70%, but the Graham Price fell only 45%. Since 2008, the stock price has been way below the Graham Price. This test shows a very low stock price, but because of what has been happening lately, maybe it is not as low as it first appears.

The book value has not gone down like to share price. The 10 year median Price/Book Value Ratio is 1.63 (although it used to be closer to 2.00). The current P/B Ratio is just 0.46. So it is low on an historical basis. Also the book value is higher than the stock price. This shows a very low stock price.

I get a 5 year dividend yield of 2.33% and the current one is 40% higher at 3.3%. However, before the latest crisis, dividend yield was between 3.5% and 4.5%. So, currently it is higher than it has been lately, but this stock has yet to recover from the latest crisis.

When I look at analysts’ recommendations, I get Strong Buy, Buy and Hold. The consensus recommendation would be a Strong Buy.

One Buy recommendations gives a 12 months stock price of $18 US$. He goes on to say that Barclays is in a challenging operating environment. A couple of Analysts say they prefer Standard Chartered Bank (LSE-STAN) to Barclays. One commented on the fact that it is weighted to investment banking so will probably trade at a discount to a good retail bank.

Most analysts think that the dividends are going to grow nicely over the next few years. They also think that earnings will grow nicely also. Revenue is expected to be lower in this year (2012), and then grow modestly. There is an interesting article about this bank and the CEO’s pay. See G&M article. Barclays bank had awarded the CEO, Bob Diamond, a £2.7M bonus for 2011 which was 80% of maximum. Because of the revolt of shareholders on pay to the CEO of Citibank, Barclays CEO agreed to forfeit half his 2011 bonus unless Barclays lifts its return on equity (which was a lowly 6.6 per cent last year) above its 11.5 per cent cost of equity. You can read all about this bank at Wikipedia.

Currently, I intend to hold on to my shares. I still believe it will recover.

Some of the US sites on BCS’s estimates are confusing. Part of the reason is London Stock Exchange reports in pence. That is share price of £2.12 is reported as 212 GBX or GBp.

One of the largest financial services groups in the United Kingdom, Barclays is engaged in banking, investment banking and asset management worldwide. Its web site is here Barclays. See my spreadsheet at bcs.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.