Wednesday tips round-up: Lloyds, Barclays, Stagecoach
The Telegraph says investors in UK banks had a lot to digest on Tuesday, what with the confirmation of Lloyds’ Ł13.5bn rights issue and Royal Bank of Scotland (RBS) coming back to the taxpayer cap in hand and the asset sales forced upon the banks by European regulators.The paper suggests existing Lloyds shareholders should take part in the fund-raising, if only to avoid heavy dilution of their stakes. If they choose not to take up their rights, Lloyds estimates that shareholders’ voting interests will slump by almost 80%.
The shares will be priced on 24 November at the higher of 15p, or a 38% to 42% discount to the ex-rights price, calculated as 29p to 34p based on Monday’s closing price. With the stability provided by the huge capital raising, Lloyds can start afresh as a profitable retail bank. Existing investors should certainly take up their rights, concludes the Telegraph.
The Telegraph's top banking pick is Barclays, which it says has deftly manoeuvred its way through this financial crisis. Barclays avoided the dramatic caps on bonuses that Lloyds and RBS were forced to accept yesterday. As such, it can scoop up any of the top talent inclined to jump ship if their pay package is hit.
Barclays is also at liberty to pay a dividend and is trading on just 1.1 times its tangible book value, which looks cheap considering its growth prospects over the next three years. Barclays seems the safest bet of the lot. Buy says the paper.
Today's Headlines
Barclays (BARC) | Price: 323.45p | Change: -1.98% Questor:Barclays Hammerson (HMSO) | Price: 390.50p | Change: -0.43% Investment Column:Hammerson Tempus :Hammerson New Britain Palm Oil Limited (NBPO) | Price: 362.50p | Change: -6.59% Tempus:New Britain Palm Oil Rolls-Royce Group (RR.) | Price: 443.10p | Change: -1.90% Investment Column: Rolls-Royce Stagecoach Group (SGC) | Price: 140.70p | Change: -1.75% Investment Column:Stagecoach Group |
| P/E: 5.5 | Div Yield: 3.6% 
| P/E: 10.2 | Div Yield: 7.1% 
| P/E: 37.9 | Div Yield: 5.0% 
No comments:
Post a Comment