BOI shares steadily rising... Worth a punt?

Sonnenblumen

Jimmy Bottles wrote: »

Up 4% today. I'm guessing profits and then an announcement of dividend will be the kicker to finally get the share price moving ?

I wouldn't ignore the pending Rights Issue, the stronger the market/current SP price the more attractive they can make the Rights Issue. I'd expect a correction after the Right's Issue and it would be a good time to get in if you're not onboard already.

Too early to talk about BoI paying a divi, but that would also give a boost to SP. Foreign banks leaving Irl is also good news for the SP.

Scortho

Jimmy Bottles wrote: »

Up 4% today. I'm guessing profits and then an announcement of dividend will be the kicker to finally get the share price moving ?

Share price moving?
It's up 200 % since August 2012

Jimmy Bottles

I would have thought that a dividend from BOI would be the really big ice breaker for one reason.

When dividend starts to get paid again, low to medium risk pensions and investments funds will jump in their again. They can't touch those BOI share at the moment for lack of a dividend.

love_struck

Jimmy Bottles wrote: »

I would have thought that a dividend from BOI would be the really big ice breaker for one reason.

When dividend starts to get paid again, low to medium risk pensions and investments funds will jump in their again. They can't touch those BOI share at the moment for lack of a dividend.

id be amazed if a dividend is reinstated by this time next year

gordongekko

love_struck wrote: »

id be amazed if a dividend is reinstated by this time next year

Dividend payments
BOI is also barred from making dividend payments until the end of 2015, as long as the preference shares remain unredeemed. Andrew Keating, the bank’s chief financial officer, said the payment of dividends is “a factor” in its thinking as it formulates a preference share strategy.

littlemac1980

Sonnenblumen wrote: »

I wouldn't ignore the pending Rights Issue, the stronger the market/current SP price the more attractive they can make the Rights Issue. I'd expect a correction after the Right's Issue and it would be a good time to get in if you're not onboard already.

Too early to talk about BoI paying a divi, but that would also give a boost to SP. Foreign banks leaving Irl is also good news for the SP.

For me, granted I am a relative novice in shares - I don't see the Rights Issue as an issue at all, simply because everyone is aware of the possibility of it arising, and how much is required to be raised, i.e. there's no real uncertainty regarding it.

I expect it's already factored into the share price in some sense, and it is of course a worst case scenario - in that the money can be, and may be raised elsewhere.

On top of that, having regard to what appears to be a steady sustained rise in the share price, any effect of the Rights Issue on the share value - should it actually arise - could just be swallowed up and negated in a day or two. Or am I missing something?

ranger4

Rights issue to buy Govs prefs could be avoided altogether,

http://www.independent.ie/business/irish/bois-shares-rise-43pc-on-clear-path-to-share-sale-29717316.html

mickman

sold out yesterday at a 90% gain .

will monitor and prob re - enter after a correction

lucky john

"Any lingering fears of a large-scale rights issue should now be finally set aside, though an equity placing does remain a possibility. Our assumption is that the 25% principal step-up feature (€450m higher replacement cost) of the instruments will be removed as part of any resale. Although still early, we also note the resale/retirement also lifts the EC-imposed dividend restrictions"

From davy's this morning. Its the only bit of their comment I really understood.

mickman

lots of talk about BOI at the moment and lots of people jumping on the band wagon. looking a little frothy to me

Scortho

mickman wrote: »

sold out yesterday at a 90% gain .

will monitor and prob re - enter after a correction

Well done on the gains man. Nothing wrong with those.:)

mickman

Scortho wrote: »

Well done on the gains man. Nothing wrong with those.:)

Thanks . sweet gains indeed.

AP_MAN

as per current SP, 30K shares in issue, the market cap is 8b, is that realistic value ?

Scortho

AP_MAN wrote: »

as per current SP, 30K shares in issue, the market cap is 8b, is that realistic value ?

As far as I remember they were worth 18 bn before the crash.

To me it isn't a realistic value (which was why I got out) but to others it might be.
I was happy with my gains though....ain't happy with the CGT I have to give revenue however:mad:

littlemac1980

AP_MAN wrote: »

as per current SP, 30K shares in issue, the market cap is 8b, is that realistic value ?

Personally I believe €8 bn value for a Strategic National Bank (with extensive existing infrastructure/client base/loan books) that is making profit - where all other banks in the country are not, is peanuts.

Just to put that figure in context - It wasn't too long ago the government nearly spent €1 bn on building a National Stadium, and likewise there have been numerous examples of spending in the hundreds of millions of euros on projects that were never even implemented.

The country may still be far "worse off" (some would argue its better off) than in 2007, but apart from the whale of a public sector we're dragging with us, the private sector - particularly multi-national services and industries are still here, and performing well.

Property prices are rising (a little too quickly some might say) in Dublin, and there is signs of tenative recovery throughout the country.

There's still the lingering mortgage crisis, but all-in-all the banks have dealt with that fairly well from a commercial perspective by not accepting wholesale right-downs and therefore minimising losses and opportunist defaulters.

Value Hunter

littlemac1980 wrote: »

Personally I believe €8 bn value for a Strategic National Bank (with extensive existing infrastructure/client base/loan books) that is making profit - where all other banks in the country are not, is peanuts.

Just to put that figure in context - It wasn't too long ago the government nearly spent €1 bn on building a National Stadium, and likewise there have been numerous examples of spending in the hundreds of millions of euros on projects that were never even implemented.

The country may still be far "worse off" (some would argue its better off) than in 2007, but apart from the whale of a public sector we're dragging with us, the private sector - particularly multi-national services and industries are still here, and performing well.

Property prices are rising (a little too quickly some might say) in Dublin, and there is signs of tenative recovery throughout the country.

There's still the lingering mortgage crisis, but all-in-all the banks have dealt with that fairly well from a commercial perspective by not accepting wholesale right-downs and therefore minimising losses and opportunist defaulters.

Its not making profit

'Strategic National Bank' - In a tiny country with a flat economy at best.

What does Government building projects have to do with valuing a business??

If you think 8 Billion is peanuts, i'd love to hear what you think they are actually worth?

mickman

littlemac1980 wrote: »

Personally I believe €8 bn value for a Strategic National Bank (with extensive existing infrastructure/client base/loan books) that is making profit - where all other banks in the country are not, is peanuts.

Just to put that figure in context - It wasn't too long ago the government nearly spent €1 bn on building a National Stadium, and likewise there have been numerous examples of spending in the hundreds of millions of euros on projects that were never even implemented.

The country may still be far "worse off" (some would argue its better off) than in 2007, but apart from the whale of a public sector we're dragging with us, the private sector - particularly multi-national services and industries are still here, and performing well.

Property prices are rising (a little too quickly some might say) in Dublin, and there is signs of tenative recovery throughout the country.

There's still the lingering mortgage crisis, but all-in-all the banks have dealt with that fairly well from a commercial perspective by not accepting wholesale right-downs and therefore minimising losses and opportunist defaulters.

They lost 500 million last results, they are not making a cent profit! They hope to turn profitable next year and then maybe bring back some kind of dividend in 2015

its valued at 1/3 of what it was during the boom, if it hits 60 cent then its value will equal what it was during the boom. With the bank not making any money, i cant see how its under valued

Scortho

mickman wrote: »

They lost 500 million last results, they are not making a cent profit! They hope to turn profitable next year and then maybe bring back some kind of dividend in 2015

its valued at 1/3 of what it was during the boom, if it hits 60 cent then its value will equal what it was during the boom. With the bank not making any money, i cant see how its under valued

They need eu approval to pay a dividend and so far this is blocked for 2015 and beyond.
Part of the agreement for it to keep its insurance arm I think.

Jimmy Bottles

mickman wrote: »

They lost 500 million last results, they are not making a cent profit! They hope to turn profitable next year and then maybe bring back some kind of dividend in 2015

its valued at 1/3 of what it was during the boom, if it hits 60 cent then its value will equal what it was during the boom. With the bank not making any money, i cant see how its under valued

I've read a boom valuation would equate to 77c per share in todays shares.

There are a few reasons IMO why BOI could be worth more.

1. Less players in the Irish market
2. AIB, their main competitor are in a much worse position that BOI. AIB are nowhere near turning a profit.

littlemac1980

Value Hunter wrote: »

Its not making profit

'Strategic National Bank' - In a tiny country with a flat economy at best.

What does Government building projects have to do with valuing a business??

If you think 8 Billion is peanuts, i'd love to hear what you think they are actually worth?

1. All expectations are that it will report a profit either this quarter or next... that's a far better position than any other Irish Bank, and indeed many other Global Banks, and a fair prediction based on current and previous data.

2. Yes it is a Strategic National Bank. Ireland is geographically small yes, but the Economy may be flat at present but it won't remain that way for long, all indications are that the economy is improving and we are doing much better than many other Countries, we have massive Global Companies here Apple, Amazon, IBM, etc.

3. As my post clearly indicates - Government spending has nothing to do with valuing banks, the example was to show the true modern context of what 8 bn really amounts to - about 8 (overpriced) national stadiums, 8 bn seems like a scarily large number its not - were it the case that we were in a period of sustained Economic Growth of two to three years then 2 times, 3 times or even 4 times that value would not seem disproportionate for a primary National Bank in a Country such as ours.

4. BOI is in my personal view waaaay undervalued at present - "Peanuts" for a National Bank that's performing well and heading into a recovering economy with no competition and massive market share.

I accept you are entitled to your views, and mine are, as I stated at the beginning of my previous message just mine, but if you're going to outright disagree I'd prefer if you added a little more than effectively saying "You're having a laugh"

littlemac1980

Jimmy Bottles wrote: »

I've read a boom valuation would equate to 77c per share in todays shares.

There are a few reasons IMO why BOI could be worth more.

1. Less players in the Irish market
2. AIB, their main competitor are in a much worse position that BOI. AIB are nowhere near turning a profit.

Yes Jimmy I agree with you there.

I actually made much the same points as you in this previous post:

http://www.boards.ie/vbulletin/showthread.php?p=86101891

However it seems since then the banking landscape in Ireland has changed dramatically with the exit of more competition - all which certainly improves BOI's overall position.

gordongekko

is the strategic national bank not called nama.

Boi is a loss making small regional bank on the outskirts of Europe. Why anyone would buy them at over the price of Mr. Ross is beyond me.

wenxue

I spend 20000e bought BOI today,
Hope get better result。

dharn

wenxue wrote: »

I spend 20000e bought BOI today,
Hope get better result。

You are a brave man

Value Hunter

littlemac1980 wrote: »

I accept you are entitled to your views, and mine are, as I stated at the beginning of my previous message just mine, but if you're going to outright disagree I'd prefer if you added a little more than effectively saying "You're having a laugh"

Fair enough, i'll explain my viewpoint in greater detail

1. This is not a business in growth/recovery mode. Operating income has declined every single year since 2010. Its on track to be 40% lower for 2013 than in 2010. With revenue constantly declining alongside it, this is not a business where profits will grow.

2. BOI have recorded impairment charges of €12.38 Billion since 2010. We all know bad loans haven't begun to be tackled properly yet.

My view is if they've recorded over a €12 Billion loss so far, who knows how high it can go when their forced to actually tackle defaulting mortgages.

Would €15 - €20 Billion be beyond the realms of possibility? More?

Even a €5 Billion impairment charge will likely devastate the share price

3. The current improvement in performance has almost exclusively being attributed to cost cutting/branch closure and (credit where its due) to improving the cost of interest expense.

Both these measure have limitation which are almost reaching saturation point.

4. Its current valuation is massively overvalued. People buying at this level are purely speculating. Yes they make make a 50% return in 3 months. Hurricane Fly might also make me a 50% return in 10 minutes at Cheltenham next year. Doesn't make it an investment.

5. The use of tax credits from their massive losses will run out eventually. This will adds hundreds of millions to their costs every year.

6. Why would you invest in BOI? There is so much better options out there. Royal Bank of Canada has a 4% dividend, trades at just 12 times earnings and has revenue growing around 4% and profit growing around 15%.

I think BOI management have been very clever. They've fought tooth and nail to avoid acknowledging write downs. This has given them time to implement cost cutting and to improve their interest margins. This will allow them to return to a very small amount of profitability within a year, giving the false impression of a recovery.

Believe me, this return to profitability will be very short lived. Once write downs start to occur, profitability is going to be a distant memory and the share price is going to get hammered.

mickman

A lot of this huge worldwide stock rally has been created from massive cost cutting by companies rather than growth

Those situations usually end in tears

wenxue

dharn wrote: »

You are a brave man

hha
Just think Ireland will better , if lost just lost it.

dharn

wenxue wrote: »

hha
Just think Ireland will better , if lost just lost it.

If lost, just lost it ? Must be great to have 20 grand that you would not care abou losing

euroboom13

Value Hunter wrote: »

Fair enough, i'll explain my viewpoint in greater detail

1. This is not a business in growth/recovery mode. Operating income has declined every single year since 2010. Its on track to be 40% lower for 2013 than in 2010. With revenue constantly declining alongside it, this is not a business where profits will grow.

2. BOI have recorded impairment charges of €12.38 Billion since 2010. We all know bad loans haven't begun to be tackled properly yet.

My view is if they've recorded over a €12 Billion loss so far, who knows how high it can go when their forced to actually tackle defaulting mortgages.

Would €15 - €20 Billion be beyond the realms of possibility? More?

Even a €5 Billion impairment charge will likely devastate the share price

3. The current improvement in performance has almost exclusively being attributed to cost cutting/branch closure and (credit where its due) to improving the cost of interest expense.

Both these measure have limitation which are almost reaching saturation point.

4. Its current valuation is massively overvalued. People buying at this level are purely speculating. Yes they make make a 50% return in 3 months. Hurricane Fly might also make me a 50% return in 10 minutes at Cheltenham next year. Doesn't make it an investment.

5. The use of tax credits from their massive losses will run out eventually. This will adds hundreds of millions to their costs every year.

6. Why would you invest in BOI? There is so much better options out there. Royal Bank of Canada has a 4% dividend, trades at just 12 times earnings and has revenue growing around 4% and profit growing around 15%.

I think BOI management have been very clever. They've fought tooth and nail to avoid acknowledging write downs. This has given them time to implement cost cutting and to improve their interest margins. This will allow them to return to a very small amount of profitability within a year, giving the false impression of a recovery.

Believe me, this return to profitability will be very short lived. Once write downs start to occur, profitability is going to be a distant memory and the share price is going to get hammered.

If we start getting growth, every negative item you have mention, starts to improve.

In 2005/6/7 everyone was putting there ssia savings(robbbed by guru`s) in to boi/aib shares on the pretence of a well analysed/ blue chipped/ dividend paying/ stock,tipped as a sure investment(Like bank of canada/which has a property boom now by the way).


ALL INVESTING IS GAMBLING and in this world, the surething is the high risk, not the outsider.

ps. Tax credits only run out when profit surpasses them!hows that negative ?

caoty

No.5 doesn't make any sense, imho.

Value Hunter wrote: »

Fair enough, i'll explain my viewpoint in greater detail

1. This is not a business in growth/recovery mode. Operating income has declined every single year since 2010. Its on track to be 40% lower for 2013 than in 2010. With revenue constantly declining alongside it, this is not a business where profits will grow.

2. BOI have recorded impairment charges of €12.38 Billion since 2010. We all know bad loans haven't begun to be tackled properly yet.

My view is if they've recorded over a €12 Billion loss so far, who knows how high it can go when their forced to actually tackle defaulting mortgages.

Would €15 - €20 Billion be beyond the realms of possibility? More?

Even a €5 Billion impairment charge will likely devastate the share price

3. The current improvement in performance has almost exclusively being attributed to cost cutting/branch closure and (credit where its due) to improving the cost of interest expense.

Both these measure have limitation which are almost reaching saturation point.

4. Its current valuation is massively overvalued. People buying at this level are purely speculating. Yes they make make a 50% return in 3 months. Hurricane Fly might also make me a 50% return in 10 minutes at Cheltenham next year. Doesn't make it an investment.

5. The use of tax credits from their massive losses will run out eventually. This will adds hundreds of millions to their costs every year.

6. Why would you invest in BOI? There is so much better options out there. Royal Bank of Canada has a 4% dividend, trades at just 12 times earnings and has revenue growing around 4% and profit growing around 15%.

I think BOI management have been very clever. They've fought tooth and nail to avoid acknowledging write downs. This has given them time to implement cost cutting and to improve their interest margins. This will allow them to return to a very small amount of profitability within a year, giving the false impression of a recovery.

Believe me, this return to profitability will be very short lived. Once write downs start to occur, profitability is going to be a distant memory and the share price is going to get hammered.