Banking stocks are made for trading

February 26, 2024 Leave a comment

The circles in the chart below suggest moments when to accumulate shares in Wells Fargo & Co. #WFC.US

These are the moments when the stock price has traded below its 200 week moving average and also 2.5 standard deviations below its rolling weekly mean.

This study is only focused on the buying moment and not the selling moments.

Owning #WellsFargo stock hasn’t been synonymous with a ‘set and forget’ strategy. This is the case with many #banking stocks around the world.

Indeed, there are times when you should ponder selling the stock.

For example, today’s Wells Fargo stock price is still the same price it was 10 years ago.

And it hasn’t been an extraordinary compounder over the last 20 years either with an approx. annual return of 4.6%.

At ~ $54, I’m taking the ‘fat part of the trade’.

February 26, 2024

by Rob Zdravevski

rob@karriasset.com.au

Screenshot

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Industry Super Funds – Lenders of First Resort

November 8, 2020 Leave a comment

There is a growing trend in the Australian superannuation industry landscape.

We’ve seen large super funds investing in infrastructure (tollroads, airports), agriculture (avocados), pastoral enterprises and finance property development.

Now, behemoths such as AustralianSuper are ‘lending to’ or underwrite the acquisition of businesses and assets in receivership.

One recent example is AustralianSuper’s partnering with resources private equity fund, RCF in a distressed lithium ‘play’.

Surely, these mega funds will be courted increasingly because if you think Private Equity is regarded as ‘patient capital’, then quadruple that timeline and you’ll resemble a large industry pension fund.

The larger topic is to see Industry Super Funds become a mainstream lender to business, ultimately unlocking a nearly $3 trillion pile of money.

This has been discussed for a couple years.

Perhaps Super Funds can provide a banking lending service?

November 8, 2020
by Rob Zdravevski
rob@karriasset.com.au

https://www.afr.com/street-talk/aussuper-piles-into-230m-pilbara-deal-to-buy-altura-20201028-p569b3

https://www.afr.com/wealth/superannuation/industry-super-funds-ready-to-lend-to-business-20180902-h14u7u

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Bullish on Aussie Banks

October 19, 2020 Leave a comment

After 5 years, I have now become bullish on Australian banks.

For example, Westpac Bank’s 2021 forecasts have it trading below 1x book value, on a P/E of 11 and the dividend yield should be 5%, not including the franking credits.

Furthermore, I think its net interest margins will increase (as longer dates interest rates rise) and all of their bad news and fines are no longer “new news”, Westpac’s stock price also has traded at monumentally oversold readings…….not on a daily nor weekly basis, but on a Monthly reading.

See the chart below and you’ll see it’s only happened twice in 27 years.

October 19, 2020
by Rob Zdravevski
rob@karriasset.com.au

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