Personally, I wouldn't complicate an investment decision with a punt on an exchange rate reverting to an historical average. Too many ifs and buts there for my conservative liking!
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.
Last edited by Beagle; 09-02-2016 at 09:09 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
I haven't seen ANZ this undervalued in a long, long time...
How do you know it's undervalued???? Market is pricing in risks to future earnings - vs last year earnings it may look undervalued. What is your EPS and DPS estimates for next year??
How do you know it's undervalued???? Market is pricing in risks to future earnings - vs last year earnings it may look undervalued. What is your EPS and DPS estimates for next year??
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.
How do you know it's undervalued???? Market is pricing in risks to future earnings - vs last year earnings it may look undervalued. What is your EPS and DPS estimates for next year??
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
I doubt that the rest of the worlds banks are much better off.
Useful link - cheers for posting! And yes - while the situation does not yet seem to have reached GFC levels ... it sort of looks like we might be on this slippery slope again. Certainly a good idea to be careful.
Discl: sold out some days ago.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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Originally Posted by macduffy
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