Close Brothers Share Discussion Threads

[popit] 07/3/2024 16:15

I am not saying the liability is £500 million

The liability is not known

That is the problem for CBG

Others on here have suggested a potential liability of £1 billion

The car loan book for CBG is £2 billion so the FCA could even say it should all be paid back to customers

The liability is not known and so that is the issue and the problem

Other banks like OSB and STB also have a very low forecast PE but they do not have this problem of an unknown liability

[blueclyde] 07/3/2024 13:50

Two big trades of 491,000 each just went though hence the rise.

[stoopid] 07/3/2024 12:18

You are saying or suggesting that CBG may have a liability of up to 500m?LLOY have already made a provision of 450m and they have approx 10 times the size of the car loans/financing book that CBG does. Also on a forward P/E ratio of 2 to 3 CBG look very cheap. Barclays have a forward P/E of 6 to 8. Also the fact that Royal London have bought 6m shares recently says a lot. I think you need to DYOR better....I'm quite happy with my 3k shares @3.4

[blueclyde] 07/3/2024 07:43

Virgin Money taken out at 3 billion valuation paid for in cash. Close Brothers at 500 million valuation and throwing off cash and has the brokerage and AUM business too. Interesting times.

[blueclyde] 07/3/2024 07:38

Nationwide make a take over offer for Virgin Money. With this being so far below its NAV of 920p it is a sitting duck.

[karv1] 07/3/2024 07:15

There a perfect Goldilocks zone for size growth and returns STB is to small and BARC is to big. OSB would be in it with my limited research but is already value at 1.8 billion. The odds of them in 3 to 5 years of this going to 3.6b are low the odds of it going to 7.2b are 0.
Now use that ratio on CBG this is not even including the dividend. This of course ignores all risks as no one knows so I am going with a optimistic view.

[popit] 07/3/2024 04:00

karv

I think CBG may be very good value but that will depend on what the result of the FCA investigation will be

I was also saying that other UK banks like OSB and STB are on a similar low forecast PE and they do not have any FCA problem or unknown liability

OSB has a forecast PE of 4 and STB has a forecast PE of 3

The forecast PE for CBG may seem low but it is not so low when compared to other UK banks

Even a huge bank like Barclays is on a forecast PE of 4

So I was saying that OSB and STB seem to be less expensive than CBG and they are also without the very large risk of an unknown liability

If the CBG liability is less than £100 million then the shares are very cheap

But if the liability is £500 million or higher the shares are not so cheap

[cirlbunting1] 06/3/2024 09:58

quicker than anticipated reaching BE. Happy to continue holding.

[dplewis1] 06/3/2024 09:39

One of my concerns when I bought was that there would be some kind of daily mail instigated run on other close brothers products .. people pulling money from funds etc. Thankfully this doesn't seem to have materialised but results next week will reveal more

[blueclyde] 06/3/2024 09:13

Meant 385 now 387 to buy. Could be another big up day.

[blueclyde] 06/3/2024 09:04

Just ignore them. 285 on the buy. The algo is back accumulating for institutional holders that's all that matters.

[stoopid] 06/3/2024 08:41

Karv, chill, he's baiting the board.The current market cap is ridiculous unless CBG are going bust.Most if not all the Novitas write downs are done. Winterflood will either be sold or come good and start contributing to revenues again. Will take a while and will also need the FCA investigation to be less punishing than some expect but CBG should be just fine and any who have taken positions sub 400 should find themselves well rewarded.

[cyberbub] 06/3/2024 08:11

Let's see if we can make a run for 400 this week?

[karv1] 06/3/2024 06:18

Popit unless I am reading it wrong how can you say the forecast make CBG look expensive.99% of companies would love to even get close to CBG forecast on the lower end.
The high end analysts view for 2026 is for 22% dividend and 400m pre provision and AOP 300m profit on a company valued currently at 550m

[blueclyde] 05/3/2024 21:03

Yeah agree I can see it going back up there in time. Should get some further colour with results in a couple of weeks. Also business will improve further I believe as electricity prices continue to fall which will mean people get more money in their pockets ect.

[cyberbub] 05/3/2024 20:29

Remember that CBG was at 1500p less than 3 years ago. The slow decline to 1000p was probably due to the Novitas concerns, and then perhaps the dip to 800p as some people started 'twigging' the car finance issue. Then the shorters pushed the share price off a cliff below 300p. *If* the company faces new costs of no more than £200m say, and Novitas is now fully written down and gone, why couldn't we be back at 1500p in another 2-3 years?Just my view etc

[popit] 05/3/2024 20:27

These forecasts still make CBG look fairly expensive and these forecasts were made before the FCA problem

The average forecast eps for 2024 of 96p gives a PE of 4 and that is before the FCA problem so the actual eps will be much lower

Banks like OSB and STB are on a similar low PE and do not have any FCA problem

So OSB and STB seem to be far less expensive than CBG and they are also without the very large risk of an unknown liability

[blueclyde] 05/3/2024 19:33

That is a great find! Look at the dividends at even the low estimates. I have bought my shares and that is them tucked away for the long term. Those dividends will buy me a luxury holiday for a couple of weeks every year if and when they come back along with potential huge capital appreciation.

[karv1] 05/3/2024 19:10

It Seems like a yo-yo pattern currently with this stock but we are slowly heading in the right direction.
I was reading this old consensus and found it very interesting pre Fca review. I think this company is a pure money making machine for it size. It potential is huge for a 550m valuation…

www.closebrothers.com/sites/default/files/IR%20Consensus/CBG%20Company-compiled%20consensus%20-%20dated%2023%20Nov%202023.pdf

[blueclyde] 05/3/2024 12:37

Results are two weeks on Tuesday so I would expect the big move to happen then if there is further information given.

[cyberbub] 05/3/2024 12:19

Never too late Trev :-)

[123trev] 05/3/2024 11:55

I can honestly say there is a big part of me kicking myself for not keeping my £2.86 holding and in years to come I might be kicking even harder lol. The problem for me is I’m a short term investor and if I see a good return in a short space of time I am prone to taking it.

[blueclyde] 05/3/2024 11:11

Volume is very low. But if you look today the algo is back trying to buy. Could be another leg up incoming.

[karv1] 05/3/2024 10:15

The Volume seems to be very low.
Unless there are hidden trades from 60k to 80k in the trades, the share has dropped 1% and around 5 million in value.
I guess with less trades this means people are not panic selling anymore but at the same time new investor's are being cautious.

[dplewis1] 04/3/2024 18:07

Wints likely to benefit from the "Brit ISA" and stamp duty amendments in the budget