Plus a big dose of contagion from European banks' problems. Confidence is a delicate flower!
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Plus a big dose of contagion from European banks' problems. Confidence is a delicate flower!
I haven't seen ANZ this undervalued in a long, long time...
Agree that forward PE looks very cheap based on broker estimates but what's the real earnings if they provide for all problematic loans properly as and when they should over the next few years...I believe that's the real issue. Can you trust the bankers estimates of provisioning...that's another issue. In my opinion catching a rapidly falling knife is fraught with a LOT of risk.
PB is a better tool to value banks.
Currently ANZ has 1.2PB, WBC has 1.8PB, CBA has 2.36PB.
So ANZ is relatively "cheap" compare to other banks.
However ANZ is more exposed to Chinese market.
They invested lots of money in Chinese banks, and they are not looking good at all atm.
Chinese banks are facing biggest crisis since 1998.
I also look at the price to NTA, 74% of ANZ's share price is backed by NTA (far higher than all the other banks), not to mention lowest PE, and highest dividend yield compared to the other major banks (I am comparing their ASX listings)... I also think while things might not be great for ANZ, the risks are already well priced in... this stock is now cheaper than it was in 2012, yet I believe they are in a better posotion
This mornings FT video is VERY negative on US and European banks:
http://video.ft.com/4745075317001/Ba.../editorschoice
I doubt that the rest of the worlds banks are much better off.
An interesting article from last week's AFR on the relative "values" of the big four Aussie banks and some of their overseas counterparts.
http://www.afr.com/business/banking-...social_twitter