Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Daily Grime - Chart/ARBB/STB

By Jeremy GrimeStock MarketsOct 16, 2019 09:18
uk.investing.com/analysis/daily-grime--chartarbbstb-200433501
Daily Grime - Chart/ARBB/STB
By Jeremy Grime   |  Oct 16, 2019 09:18
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Chart of the week

  • Yesterday the FTSE was off while small cap rose with some sharp moves for some names. There is something a little poetic that yesterday Woodford announced the closure of his business just as smaller stocks could be turning. Tony Dye left PDFM in February 2000 just a month before the tech boom was over. Possibly the closure of Woodford could be the time to buy small caps.
  • This chart was sent to me by a retired fund manager who is better than me with datastream. It measure the performance of the FTSE 250 vs FTSE 100 relative to the FTSE Small cap vs FTSE 100 and illustrates the liquidity aversion that has been building since 2017

    Arbuthnot Banking Group Plc (LON:ARBB) – Q3 Update

    Share Price 1065p

    Mkt Cap £159m

    Conflict Disclosure: I Hold

  • Update Mixed update with the core loan book growing 33% year on year to £1.6bn which is a little behind expectations due to uncertainty causing delays on draw downs while IFRS 9 has required higher provisions for legacy impairments. Against that the £265m mortgage portfolio acquisition is performing better than the models predicted at acquisition. The AUM at the private bank is below expectations due to market conditions. The new business divisions are growing strongly but remain small with a loan book of £208m and a small number of defaults have been experienced.
  • Estimates PBT is expected to grow 30% in the current year to £9.3m followed by 50% next year to £14.2m. It sound like this may move to the right.
  • Valuation NAV is £196m and market cap £159m. To earn an efficient ROE on this NAV will require in excess of £20m PBT which was anticipated at the end of 2021 but may take longer. However when it is achieved it is possible to see the shares at perhaps 1.5X book which is 85% above the current level. Current year PER 21X, yield 3.5%
  • Conclusion This is one for the patient investor. It will take time but the conservative nature of the lending and the discount to book provides some protection while 80% upside over 3 years is a useful return. But it looks like it may take 4 years now.

    Secure Trust Bank Plc (LON:STBS)- Q3 Update

    Share Price 1270p

    Mkt Cap £234m

    Conflict Disclosure: No Holding

  • Update Demand was health over the quarter but has slowed generally in September. The company remains comfortable with expectations and expects no negative impact from the FCA’s proposal to ban broker commission discretion in the motor finance market. It notes the short duration loan book means the company is well placed to respond to changing market conditions.

  • Estimates 18% PBT growth is anticipated in the current year and 18% the following year. The downbeat statement suggest the risks are on the downside although they are comfortable with expectations today.
  • Valuation NAV is £240m so the share trade around book value. ROE is 13.5%. PER 7.3X and yield 6.7%.
  • Conclusion The shares are very cheap but this statement is unlikely to change that.

    Daily Grime - Chart/ARBB/STB
     

    Related Articles

    Daily Grime - Chart/ARBB/STB

    Add a Comment

    Comment Guidelines

    We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

    • Enrich the conversation
    • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
    • Be respectful. Even negative opinions can be framed positively and diplomatically.
    •  Use standard writing style. Include punctuation and upper and lower cases.
    • NOTE: Spam and/or promotional messages and links within a comment will be removed
    • Avoid profanity, slander or personal attacks directed at an author or another user.
    • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
    • Only English comments will be allowed.

    Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

    Write your thoughts here
     
    Are you sure you want to delete this chart?
     
    Post
    Post also to:
     
    Replace the attached chart with a new chart ?
    1000
    Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
    Please wait a minute before you try to comment again.
    Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
     
    Are you sure you want to delete this chart?
     
    Post
     
    Replace the attached chart with a new chart ?
    1000
    Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
    Please wait a minute before you try to comment again.
    Add Chart to Comment
    Confirm Block

    Are you sure you want to block %USER_NAME%?

    By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

    %USER_NAME% was successfully added to your Block List

    Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

    Report this comment

    I feel that this comment is:

    Comment flagged

    Thank You!

    Your report has been sent to our moderators for review
    Our Apps
    DOWNLOAD APPApp store
    Investing.com
    © 2007-2022 Fusion Media Limited. All Rights Reserved.
    Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
    Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
    Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
    It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
    Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
    • Sign up for FREE and get:
    • Real-Time Alerts
    • Advanced Portfolio Features
    • Personalized Charts
    • Fully-Synced App
    Continue with Google
    or
    Sign up with Email