Monday, April 15, 2013

Barclays Bank PLC ADR 2

On my other blog I am today writing about my blog warning on investing ...continue...

I own this stock of Barclays Bank PLC ADR (UK-BARC, NYSE-BCS). This was one of my forays into international stock. I bought this stock in 2000 and today, I have 3.26% total return per year, with 5.45% per year from dividends and capital loss of 2.19% per year. This valuation is in US$. This stock was doing well until the 2008 crash.

According to the NASDAQ site, there was no insider trading over the past 12 months for this stock. I find it harder to find information on foreign stock. However, there seems to be insider ownership and outstanding share options. At the end of 2012 there were 820M outstanding options with strike prices ranging from £1.41 to £5.22 (or $2.14 and $7.94 US).

The 5 year low, median and high median Price/Earnings Ratios are 2.19, 9.66 and 12.95. (This is quite a spread in P/E Ratios.) The current P/E Ratios is 9.12 basic on stock price of $17.76 and 2013 EPS of $1.95. I get a Graham Price of $34.46 and 10 year Price/Graham Price Ratios of 0.54, 0.71 and 0.95. The current P/GP Ratios is 0.52. So the first test says the stock price is reasonable, but a bit high and the second says it is cheap.

The 10 year Price/Book Value per Share Ratio is 1.05. The current ratio is 0.67. This current ratio is only 63% of the 10 year ratios and says the stock is cheap. Also, if the P/B Ratio is below 1.00, this says the stock is cheap on an absolute basis. (Same story when the P/GP Ratio is below 1.00.)

The current dividend yield is 2.49%. The 5 year median dividend yield is some 7.7% lower at the 2.31%. This test says the stock price is reasonable and on the low side. (This may be a useful test as the dividends were dropped 4 years ago.) So it would seem that the stock price is reasonable and probably on the low side.

There is only one analyst following this stock as a US ADR. However, there are 30 analysts following this stock as a UK Bank. The analysts' recommendations are Strong Buy, Buy, Hold, Underperform and Sell. However, there is only 1 each of the last two recommendations. The consensus recommendation would be a Buy.

The 12 month stock price is £3.57 or $21.71 US$. This implies a total return of 24.69% with 2.49% from dividends and 22.2% from capital gains. (Of course, this is rather optimistic as the US stock exchanges seemed to have gone south strongly today.)

The Insider Monkey site says that Hedge funds are dropping this stock. On AOL today is a recent positive report from The Motley Fool. Goldman Sachs is less favorable and has downgraded Barclays PLC recently.

Personally, I will hold on to my shares. However, I feel that the bank has still a long way to go to recover and I am not tempted to buy more at present. See my spreadsheet at bcs.htm.

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.

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 or StockTwits.

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