Metro Bank Share Discussion Threads

[skrr223] 15/12/2019 12:53

MTRO was valued substantially more as a much smaller bank making much larger losses than it is now. The reason is that future potential carried a big premium. The capital constraints now have eroded its standalone ability to realise that potential hence the re-rate in shares. That original future potential is however greatly increased in the hands of a richer acquirer, so the value that matters is not what the share price is now but what is its future growth potential, which is substantial in my opinion.

[pione3r] 15/12/2019 12:52

SR. Again this is where you and "matlot" differ. He is not alarmed by Fri movement, to him it was a pause to let Sterling settle post election.
He thinks accumulation will accelerate by 10% in next couple of weeks and share price will go north. Once accumulation stage is completed, 300+ would just be the start.

[sentimentrules] 15/12/2019 12:51

I agree on a prospect of good share price with a new owner. Obviously isnt going to happen under current structure. But thats changing to most likely appease the fca and also no replacements yet because this board wont be deciding them (even if they do eventually announce)

Lets get one thing straight though

Fraud erdoded this price dramatically. A wrong rating on loan risks cant be deemed to be a simple error in accounting practice

But thats a good thing. It also means the rerate, isnt all about valuations. A good thing if taken over

TO be honest, im not good at looking too far ahead. I cant analyse years ahead on value , accurately

I dont go beyond a quarter. Thats more my forte

But given central banks with teams of analysts and billions in resources can hardly forecast a quarter right, this is the widest window for my pauper research methods lol

Im more a case of find a short/medium term value - get out and assess again

Those that get years ahead right - fair deuce to them - im not in that league

[smokybenchod] 15/12/2019 12:49

‘MTRO is a far more valuable business since IPO’. Don’t agree with that at all. As IPO they had a lot more ability to support fund raises to support high growth as the market rates and trusted them. You honestly think the market would support further fundraises for Metro as they operate today after the scandal? Maybe at £1 a share yes. No longer massive growth company either so this would rerate down. Also consumer confidence will have been damaged from the scandal. People need to face reality and get over this £10 and £20 a share nonsense.

[sentimentrules] 15/12/2019 12:37

Fundamentals important, but da money has got to confirm

[sentimentrules] 15/12/2019 12:36

Above is why most buy good results in a stock, and scratch their heads at a constant drop

And vice versa

[sentimentrules] 15/12/2019 12:35

This is the problem for us retail - re the fund model

We look at metro today - break it down and derive a value - mostly based on what they have told us - now lets say fair value based on revenues is 350p, book value maybe say 600p

We dont influence the market

The fund model:

Like somebody mentioned elsewhere, their systems are decision tree based, on many variables looking forward basec on their own analysis inputs

12 months time figures inputted:

Economic growth
Interest rates
Debt default rates
Property valuations based on above
Treasury expectations...
Loan book risk assessments

the list goes on - and its going to give a far different value to standard

[skrr223] 15/12/2019 12:34

This had an IPO price of around £20/share dont forget and rose to £40 from there. Even allowing for otential discount to IPO price for the large investors, I struggle to see how they are not around 90% down. MTRO is a far more valuable business since IPO, I dont see the argument for a cheap takeover below IPO price. Tabgible value is important, its the liquidation value of the business NOW. So its little to do with future prospects

[sentimentrules] 15/12/2019 12:23

£3-4 should be the target

get out and if the next drop finds support, easy get back in again

[smokybenchod] 15/12/2019 12:23

That £7 a share book value is largely irrelevant now if metro was to remain operating as it is (no breakup). Metro can’t generate decent profits without additional funding now, metro knows it, market knows it and buyer knows it. Mainly due to MREL costs and generally high cost income ratio due to branch and head office costs.

[sentimentrules] 15/12/2019 12:22

Fair value / book value - these numbers are derived from the horses mouth so to speak - re accounts and forecasts

Im more interested in what i think the funds see as fair/book value looking ahead

Of course, they are the two numbers they never release. Got to try suss them out for yourself. And its only ever an estimate anyway. First got to spot the build, then try gauge their target values by spotting the eventual distribution or short building occurring high.

Its a much easier game elsewhere, very difficult here.

......

Im looking at potential upside too - but im also considering its failure to do so, and being at a price where 1. i gave market a chance, and 2. i can get out breakeven if wrong in analysis

As you know its an aggregate game. No one stock will make you rich,(you will punt again if win) but could certainly break you if treated as 'the one'

[smokybenchod] 15/12/2019 12:20

Was thinking £4.50ish for a bid but now I think accumulation is going to be lower then I previously expected - around the £2 mark. I now reckon £3.50 for a bid. I think people saying £10 a share are being unrealistic as bidder will want to pay minimum for bank. If bidding war I reckon £4ish

[skrr223] 15/12/2019 12:17

In the context of tangible book value of £7/ share, what percentage of upside are you gaining by saving another 10p in buy price. I tend to look at it from point of how much of the potential upside am I caputuring at buy in price. For example buying something at 2p when you could have bought at 1p seems like a 100% price inflation, but in the context of £1 potential value its only 1% of potential upside

[sentimentrules] 15/12/2019 12:15

Most bulls analysis today, was also justifiable at 400-700p. Lets not forget that too.

So timing vital

[sentimentrules] 15/12/2019 12:11

Ive got 37% out of this so far. Booked

If i believed it fully covered any final tank, id stay holding now.

Im actually not 99% sure if it does. Lower down will be a very easy buy for me here

[sentimentrules] 15/12/2019 12:07

Skrr - i dont argue your analysis at all. And i hope you are right

Im just looking for reasons for lower pricing - or is this the buy?

I dont like buying even for double, when i believe there is say, 10/20% more value to be had

[sentimentrules] 15/12/2019 12:06

Buy funds get approached by shorters...so thats an immediate heads up for them at highs.

"What do the shorters know?" is the first thought when approached for loan stock. SO at that stage buys will be for shorters minimum, often. Cover.

....

I want to buy metro. Be under no doubt about that. Wouldnt short it. Expect the double

Just looking at the risks for balance

[skrr223] 15/12/2019 12:04

When you're already down 60%+ just on the £5 placing at historic low price, it's not a stretch to be 90% down overall. I expect the major holders will be not far off 90% down overall.

By the way, Tesco mortgage book went for £3.8bn to be exact. Imagine MTRO

[sentimentrules] 15/12/2019 12:01

Skrr22315 Dec '19 - 11:59 - 24244 of 24245
0 0 0
For shareholders alreafy down 90%+ and still holding, whats another 5% down, its not going to swing it. I'll be surprised if there wasnt a major bidding war for the bank if it was for sale. So many potential acquirers, it'll be a seller's market

.......

Yes true on the 90% down, but thats all retail

no fund buys high like that

its all gerbils

.....

maybe get the odd fund buy high, but to loan to shorters to cover

[sentimentrules] 15/12/2019 11:59

ANd as the man from Catalan says (nearly0

ya can take that fact to da bank lol

[skrr223] 15/12/2019 11:59

For shareholders alreafy down 90%+ and still holding, whats another 5% down, its not going to swing it. I'll be surprised if there wasnt a major bidding war for the bank if it was for sale. So many potential acquirers, it'll be a seller's market

[sentimentrules] 15/12/2019 11:58

Either way, their disclosed amounts are very rarely a true average price

[sentimentrules] 15/12/2019 11:56

Because if you dont accept, Columbian can pull the plug..loan it all out to the shorters and stick the holders down at 100p

thats always a threat. Different in bigger caps alright