Friday, April 11, 2014

Barclays PLC ADR 2

I own this stock of Barclays PLC ADR (UK-BARC, NYSE-BCS). I bought this stock when Barrett took over in 2000. Barrett used to run Bank of Montreal in Canada. At that time Barclays Bank was a good dividend paying stock and I thought it would give me some geographical diversifications.

I do not find it easy to get insider trading information for non-Canadian companies. A site I went to called Stockopedia only talked about insider trading for directors. In the past year insider selling for directors was at $30.8M US$ and net insider selling was at $30.7M US$. There was a small amount of insider buying at $0.1M US$.

Outstanding shares were increased by 257M for stock options in 2013. These shares have a book value of $1,309M US$. This number of shares were worth around $1,154.7M US$ at the end of 2013. Outstanding shares have increased by leaps and bounds over the past few years with 2010 outstanding shares increase by 12M and $54.6M US$, with 2011 outstanding shares increased by 17M shares and $63.7M and with 2012 outstanding shares increased by 44M and $157.7M US$. This involves a rather lot of money.

The 5 year low, median and high median Price/Earnings per Share Ratios are 5.73, 10.12 and 12.87. These ratios have been moving down recently as the 10 year low, median and high median P/E Ratios are 7.72, 9.79 and 11.63. The current P/E Ratios is 10.37 based on a US$ stock price of $16.32 with $1.57 US$ 2014 EPS estimates for 2014. This stock price test suggests that the stock price is reasonable.

I get a Graham Price of $32.58 US$. The 10 year low, median and high median P/GP Ratios are 0.59, 0.784 and 0.89, The current P/GP Ratio is 0.50 based on a stock price of $16.32 US$. This stock price test suggests that the stock is cheap.

I get a 10 year median Price/Book Value per Share Ratio of 0.75. The current P/B Ratio is 0.55. The current ratio is some 73% of the 10 year median ratio. This stock price test suggests that the stock price is cheap.

The 5 year median dividend yield is 2.26% and the current dividend yield is 2.62% a value some 16% higher. This stock price test suggests that the stock price is rather cheap. However, if you look at historical dividend yields, the average is 3.72% and the median is 3.44%. These are 30% and 24% higher than the current dividend yield. On an historical basis, the stock price is expensive.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold, Underperform and Sell. There is only one recommendation each in the last two categories. The consensus recommendation is a Buy. The 12 month stock price target on this stock is UK£2.95. This implies a total return of 18.88%, with 2.62% from dividends and 21.50% from capital gains. A UK£2.95 price would translate into a $19.58 US$ price.

The Motley Fool site has Alan Oscroft saying that Barclays PLC is his pick of the banks. He thinks that it is cheap and will raise dividends nicely this year and next. I hope he is right. The site WKRB talks about this bank getting both Sell and Buy ratings.

I do not like how much is going to staff incentive plans. At the moment I have no plans to sell this stock however, I am keeping my eye on it. I still hope it will do better. See my spreadsheet at bcs.htm.

This is the second of two parts. The first part was posted on Thursday, April 10, 2014 and is available here. The first part talks about the stock and the second part talks about the stock price.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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