The Lemon Fool

At the time of writing the price is up by 4%. According to ADVFN the NAV is £4.10. The current price is £2.87. What do people think. I hold some myself and I don't think there is anything else big outstanding to be resolved. I don't understand the theory that the business is of a negative value, but that sort of sentiment applies elsewhere in banking. Prior to the 2008 issues banks traded around twice NAV. I don't think we will see that soon, but I would think there is some potential capital gain in these (Brexit uncertainties, of course, remain an issue).

johnhemming wrote:At the time of writing the price is up by 4%. According to ADVFN the NAV is £4.10. The current price is £2.87. What do people think. I hold some myself and I don't think there is anything else big outstanding to be resolved. I don't understand the theory that the business is of a negative value, but that sort of sentiment applies elsewhere in banking. Prior to the 2008 issues banks traded around twice NAV. I don't think we will see that soon, but I would think there is some potential capital gain in these (Brexit uncertainties, of course, remain an issue).

I really don't know how banks can be evaluated any more, because Govts have realized they can inflict heavy fines calculated in a quite arbitrary manner, at any time of their choosing, for real or imagined misdemeanors. It beats having to raise taxes.
And when a bank such as Barclays avoids having to go running to the Govt for a bailout, it can be tied up in litigation for years.

Saying that I have put a toe in the water with Lloyds recently, as after the HBOS debacle (also Govt inspired), it looks a bit less accident prone.

johnhemming wrote:At the time of writing the price is up by 4%. According to ADVFN the NAV is £4.10. The current price is £2.87.

According to RBS's own accounts the NAV is £2.97 so pretty much a P/NBV of 1.0

In contrast LLOY has a NBV of 52.3p so at a SP of 67p that's a P/NBV of 1.3
BARC is NAV 251p and SP 211p so P/NBV of 0.8

Personally if I was going for yield I'd plump for LLOY and recovery for BARC...