AIB shares 2011, are they worth investing in?

micksontour

Hi everyone,
Im new to this invesments game and would just like to test the water for some advice. I am thinking of investing about 5k in AIB shares, which at the current price of ten cents will get me roughly 50,000 shares. My logic would be to think of this as a long term plan maybe 10-15 years down the line.
What would everyone think of this as an idea,all comments welcome.

Spacedog

They can only go up! buy low, sell high!

tfker

i was thinking the same myself,ive a couple a bob to spare

2 stroke

If you had bought in last week that same money would have bought 125000 shares. They could go down again.

Raskolnikov

Have any of you actually done any research on AIB?

micksontour

Raskolnikov wrote: »

Have any of you actually done any research on AIB?

Raskolnikov i would be grateful for any info that you have or an opinion on the question asked earlier.

japasca

Hey Guys,

I've noticed lots of threads like these so i decided to reply.
Firstly i also have lots of friends, who wish to invest their hard earned savings in order to make the most of it, rather than put it in a bank at low interest rates.
Most of my friends make the same mistake as you and look to buy irish stocks as they have little knowledge of other companies.
Regarding AIB, its current share price is €0.09 per share. The reason for this is due to the fact that its a bankrupt bank, run by incompetent people, being kept afloat by a bankrupt nation.
If i was suggesting a company to invest in i would look for a company that is profitable for a start. And with growth potential, without sponging off the taxpayer.
I think you have already given enough of your money to AIB.

If i were you i would buy a company called Silverwheaton.
Here is their stock price chart compared with AIBs.

http://uk.finance.yahoo.com/echarts?s=SLW.TO#symbol=slw.to;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

http://uk.finance.yahoo.com/echarts?s=AIB.IR#symbol=aib.ir;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

Hope the links work.

Anyway, best of luck, and take your time. If you want to gamble go to a casino, and if you want to invest, do your research.

Raskolnikov

Five minutes of Googling will tell you why AIB shares are overvalued by about 10x the current price. Seriously guys, if you're not willing to educate yourself on investing, then put your money away because you will only lose it all.

Jayminato

Hi Mick, AIB is a basket case so the short answer in my opinion is NO. Not touching with barge poles and all that mullarkey springs to mind. There are so so many other value stocks out there.

mise_me_fein3

MCD, MCD MCD.

Mc Donalds shares pay 1/4ly dividends and this is a well run company that will grow even more in Latin America and Asia in the coming year.

http://www.google.com/finance?q=mcd

The Marlboro Man

There is no logical reason to invest in AIB, or any Irish bank for that matter. The only reason people invest here is because it's in the bloody news every week. It's the only company they know of, where the stock has lost huge value.

There's thousands of stocks out there to invest in. A person attracted to AIB is obviously interested in 'high risks' stocks that could give a high return, or visa versa.

I could point you to a few, that 'might' actually give you return. I doubt very much AIB would.

Raskolnikov

Since no one has even bothered to look up the reason why AIB is so overvalued, I'll do it for you.

http://www.irishexaminer.ie/business/implied-50bn-valuation-of-aib-seems-to-be-anomaly-163080.html

Implied €50bn valuation of AIB ‘seems to be anomaly’

ALLIED Irish Banks, the country’s second-largest bank by assets, has a market value bigger than UBS and Barclays, even after its third bailout by the Government.

The taxpayer last week bought €5 billion of new shares in the bank for 1 euro cent each, giving it a 99.8% stake. That left investors with a stake valued at €100 million. Allied Irish has since traded at between 9 cents and 12 cents, for a market value of as much as €61.6 billion, three times the peak of February 2007.

Read more: http://www.irishexaminer.ie/business/implied-50bn-valuation-of-aib-seems-to-be-anomaly-163080.html#ixzz1cgVqWrGd

The true value of an AIB share is about 1 cent (as opposed to the 10 cent they are selling at now). I have come to this estimate by calculating that in a good year with no major loan losses, they could make a ROA of 1% (1% is about average ROA for a bank) on €60 billion worth of assets, giving a rough net income of €600 million. A PE of 10 gives me the valuation of €6 billion, which is for an AIB operating in a normal market and under a best-case scenario.

If anyone still has a few AIB shares kicking around, then you should sell them ASAP while there is still dumb money out there willing to pay inflated prices.

Raskolnikov

For those of you who think AIB is a shrewd buy, let me redirect you to a few threads on this forum where people have lost everything by investing in AIB, even though they were told not to.

http://www.boards.ie/vbulletin/showthread.php?p=68409955

This guy has put everything he had (€18k) in shares that by my reckoning are only worth just over €1k now.

http://www.boards.ie/vbulletin/showthread.php?p=68409955

This other guy has managed to lose over €35k on a €40k sum that he inherited and needed as a deposit for a house.

macfhinn

no

Arthurdaly

Sweet baby jesus, people still want to invest in banks? And of all banks an Irish bank? Why? Theres a reason why the share price has plummeted? You privy to good news the market or indeed world has not been informed of?

Sonnenblumen

Sure Bank stock does not appeal to the risk averse, whilst other stock with higher/lower risk levels might appeal to others (gamblers?).

But that's not to say that all Irish banks are bad? It will be interesting to look back in 10 years and see who had the savvy (and/or balls) to punt (< € 0.10/share) on Bank of Irl and discover any regrets?

Grecco

Thats the number of shares AIB have in issue, thats right 513 BILLION shares
Crazy!!!

so at 8p per share gives them a market Cap (Value) of €44 billion

Now even the blind dog on the street knows that AIB are Bankrupt, not worth
€44 never-mind €44 billion

So where is the SP rise going to come from ???
Well I`ll make a prediction
Within the next year or more theres going to be a stock consolidation of about 100:1
That will give yo a SP of €8
Then all you`ll hear is how cheap the shares were etc and how lads made a killing when in fact what will happen then is the SP will then fall from €8 back down to cents and another bunch of investors will get hammered.
Why?
Because it will still be a Bankrupt Bank

Avoid like the Plague

Thargor

Those threads Raskolnikov posted are tragic.

Raskolnikov

Grecco wrote: »

Thats the number of shares AIB have in issue, thats right 513 BILLION shares
Crazy!!!

so at 8p per share gives them a market Cap (Value) of €4.4 billion

Now even the blind dog on the street knows that AIB are Bankrupt, not worth
€4.4 never-mind €4.4 billion

It's worse than that, do your maths again

513 billion shares * €0.08 gives €44.4 billion.

Converting that to Dollars, the current value of AIB (which serves a market of 6 million people here in Ireland) is apparently almost the same to that of Bank of America, which is the biggest bank in America (by assets) serving over 300 million people, and also has a worldwide presence in consumer credit (MBNA), a stake in one of China's largest lenders, and also owns one of the world leading investment banks (Merrill Lynch).

The current valuation is just nutty beyond belief.

Thargor

Whats holding it up though? How are they getting away with these crazy numbers?

Grecco

Raskolnikov wrote: »

It's worse than that, do your maths again

513 billion shares * €0.08 gives €44.4 billion.

I stand corrected,
jezz I think I`m loosing it

Raskolnikov

Thargor wrote: »

Whats holding it up though? How are they getting away with these crazy numbers?

There is a ban on short sales for banks in Ireland, so it will take awhile for them to find their true level.

death1234567

Q. I'm thinking of investing my money in a company that's bankrupt, is this wise?
Do you even need an answer?

micksontour

I understand the bank is bankrupt but it is also under the government protection at the moment and they cant afford to nationalise it. In 15 years time this bank could return to a half way decent share price once the economy settles down again. At 8 cent a share today that would mean a huge return if you were willing to take such a high risk strategy.

Raskolnikov

micksontour wrote: »

I understand the bank is bankrupt but it is also under the government protection at the moment and they cant afford to nationalise it. In 15 years time this bank could return to a half way decent share price once the economy settles down again. At 8 cent a share today that would mean a huge return if you were willing to take such a high risk strategy.

What kind of share price are you talking about?

micksontour

Raskolnikov wrote: »

What kind of share price are you talking about?

If share prices hit even 5 euro each in 15 years time it would still be a good result. I realise they will never hit the same price that they did at their peak but even 5 euro is a good profit. It would be making a damn site more than the pension im currently paying into.

martyoo

If share prices hit even 5 euro each in 15 years time it would still be a good result.

Ah come one now! Are ya messing?

Thargor

micksontour wrote: »

If share prices hit even 5 euro each in 15 years time it would still be a good result. I realise they will never hit the same price that they did at their peak but even 5 euro is a good profit. It would be making a damn site more than the pension im currently paying into.

Pick any penny share and declare that it might go from 9p to £5 in a few years, thats a great investment too!

upforit101

japasca wrote: »

Anyway, best of luck, and take your time. If you want to gamble go to a casino, and if you want to invest, do your research.

Not trying to be smart here but the majority of people know nothing about shares.
The company you quoted could go to zero too.

Raskolnikov

Thargor wrote: »

Pick any penny share and declare that it might go from 9p to £5 in a few years, thats a great investment too!

So you think that AIB could be worth €2.5 trillion making it the most valuable company in the entire world, about 10 times as valuable as the next most valuable companies in the world (Apple, Exxon Mobil, etc.)?

Trader1991

I don't even know how AIB is still on the stock market..
If you never heard of AIB and someone came up to you and gave you a detailed account of the company as an investment, would you think "mmm..sounds like a good company that could make me a nice return"

If the answer is yes, then I would love to know what about this company you find so attractive?

I actually cant think of a worse place to put your money....Id say if your going to throw away money why not give it to charity?? at least something good comes from it..

"A fool and his money are easily parted"

That is all!

Trader1991

upforit101 wrote: »

Not trying to be smart here but the majority of people know nothing about shares.
The company you quoted could go to zero too.

You don't need to know anything about "shares"
But its not too difficult to do a simple analyses of a company. Come up with a valuation. And look at the price of the company.

If you think value out ways price then invest! if not, don't.
Granted this is as simple as it gets, but there nothing you cant read about investing. Just apply yourself a little instead of guessing!

japasca

upforit101 wrote: »

Not trying to be smart here but the majority of people know nothing about shares.
The company you quoted could go to zero too.

Are you sure your not trying to be smart? Sounded like you were….

I'm fully aware that any public company can declare bankruptcy and have its share price go to zero.
I was simply saying that after I conducted my research I purchased shares in Silverwheaton.

Have you got any share pics you would like to recommend? Then i can post on how they could hypothetically go to zero.;)