Osb Share Discussion Threads

[woodcutter] 25/8/2016 08:22

Barclays Capital today reaffirms its equal weight investment rating on Onesavings Bank [LON:OSB] and raised its price target to 235p (from 215p).

What planet are these guys on?

woody

[che7win] 24/8/2016 16:12

Up day coming tomorrow to¿

[woodcutter] 24/8/2016 11:03

third intra-day pull back coming before we see the next leg up.

woody

[woodcutter] 24/8/2016 10:49

fear, greed and irrational markets, don't you just love them!

wc

[future financier] 24/8/2016 08:57

I was very wrong about this one at the outset. They have not put a foot wrong since flotation - and the "Rochester" disposal looks like a magnificent piece of opportunism.

Respect!

[woodcutter] 24/8/2016 08:47

i wouldn't disagree with that at all.

With eps likely around 42p that's a PER of around 6 at an share price of 250p. And a eps growth rate of 20% over last year.
That puts OSB on a PEG rating of 0.3.

The share price is way out of sync with the potential. It wouldn't look expensive at 400p.

woody

[adamb1978] 24/8/2016 08:06

Very decent set of results. Loan book still growing very strongly and NIM stable. This looks far too cheap at around 6x PE. Analysts forecasts look too low - I expect them to make perhaps 42p - 44p EPS this year

[woodcutter] 24/8/2016 08:01

really strong H1 results. Massively undervalued!

woody

[adamb1978] 11/8/2016 10:20

Comment in ALD's results this morning: "Following the EU Referendum, we all face a period of heightened political and economic uncertainty. As a purely UK-focused business, we are not directly exposed to potential changes in access to European markets. However, we are exposed to the wider economic effects of the result. To date, we have seen no direct impact on our business but we continue to monitor the situation closely and have a proven ability to react quickly to a changing environment."

I dont know them well enough to know the exact read across for OSB however a similar comments from OSB in their interims in two weeks would be great. If the company is continuing to trade well, the shares are an absolute bargain at current levels

[calahan] 05/8/2016 08:00

Results are due to be published on the 24th August (Morning Star).

[adamb1978] 04/8/2016 22:19

Results should be out in 3 weeks or so; will clear up where things stand

[dendria] 04/8/2016 13:11

OSB not seem to be having as strong a recovery as ALD or SHAW so far.

[abarclay] 01/7/2016 16:23

ALD starting to creep also

[woodcutter] 30/6/2016 08:28

The whole challenger bank sector is being totally misjudged by investors on the basis that if house sales diminish it will hurt the sector. It may well hurt the builders but interest on existing loans still needs to be paid. Much depends on how interest rates move and the effects on NIM for the challengers and this has to be balanced with the potential effect on the exchange rate for the £gbp. So i figure there'll likely be no immediate moves on interest rates. Clearly there's concern over impairment and foreclosure but this appears way over done to me.

There's too much negativity on the likelihood of impairment charges in the event of a downturn in the economy. We have the highest employment figures we've had for years and even allowing for any restrictions on migrants as a result of an EU deal on trade there'll still be BTL growth to accomodate those who need homes.

The larger banks are also very much aware of the encroachment of the challenger banks on the SME loan sector and it is going to get much worse for them.

The current per ratings are ludicrous based on forecast eps.

OSB
forecast eps 39p
sp 197p
per 5
equity to loan book percentage 6.2%

PAG
forecast eps 40p
sp 250p
per 6.25
equity to loan book percentage 8.9%

ALD
forecast eps 26p
sp 121p
per 4.65
equity to loan book percentage 8.6%

SHAW
forecast eps 31p
sp 170p
per 5.5
equity to loan book percentage 11%

VM.
forecast eps 31p
sp 242p
per 7.8
equity to loan book percentage 5%

The most important metric imv is the ratio of equity to loan book value as it gives you some idea of the impairment required to wipe out the shareholder equity. You also need to consider the LTBV of the loan book in many cases this is as higher than 50% so any assets reclaimed at foreclosure have siginifcant value attached.

aimho

woody

[betelgeuse1] 30/6/2016 06:39

ALD


Numis say this

Following better than expected results for 2015 we are upgrading our EPS estimate for this year by 5% to 26.9p from 25.7p. The upgrade would have been more but for adjustments to the number of shares in issue and the group tax charge. As a result of these our EPS estimate for next year falls 2% to 32.0p from 32.7p. Excluding the impact of shares and tax our 2017 estimates would have increased modestly.

So EPS of 26.9p this year and 32.7p next year

PER of 3.5

[woodcutter] 28/6/2016 08:06

the current share price is factoring in eps of around 22p at historic per of 8. That's similar earnings to 2014 which looks very miserly.

Unlike the builders who may witness a slowing in the market and consequently a reduction in revenue the banks loan books still have to be paid even if they're not growing. So interest revenue should hold up pretty well.

aimho woody

[adamb1978] 28/6/2016 08:01

I agree woody and plan to buy some more this morning. Also the share price halving implies that there is a 50% change of OSB going bust, which is nonsense.

My base case scenario is also that common sense prevails as it appears to be and the UK stays in the EEA via a Norway style agreement. There are various MPs on the Tory side already saying that and I think it will be clear to everyone that free movement of people is a price worth paying for access to the single market and the financial passport for the City.

If that scenario plays out then its a question of timing for returning to where we were. That will be driven by the Tory leadership contest where I expect May to be fully behind that sort of solution and Johnson is already weakening on free movement of people and labour. So once the candidates emerge this week and state their positions, we'll move back in that direction.

I've also been buying more Aviva and tempted to look at the big banks.

[woodcutter] 28/6/2016 07:33

I think there's a need for some perspective here. Foxtons TS coupled with the Brexit vote has resulted in a massive over reaction causing an extreme oversold position.

The CML (council for mortgage lenders) noted that mortgage lending reached it's highest level since 2008 in the month of May so although we may see a slow down we should be mindful there's still a real supply and demand issue in the housing sector. And with the £gpb falling there'll most likely be foreign buyers in the market to pick up any bargains around London and the SE.

The base rate is 0.5% and there's some suggestion that it could fall to zero. Which may impact the NIM (net interest margin)

The forecast this year is for 39p eps which may be a little optimistic but we'll see how that progresses. If this pans out correct then the per is currently 4.5 based on 176p which is derisory.

Assuming there is a slow down and the loan book remains static and the NIM reduces by worst case 50 basis points then it will fall from 3.09 to say 2.5 that's an 16% reduction in interest returns.

Based on last years NI Income of £268m this would return £224m at 16% reduction. All things being equal taking out similar interest payable and admin costs etc the operating profit would be in the region of £86m. PAT around £68m. This assumes no impairment losses. With 243m shares in issue that an eps figure of around 28p. Historic per is 8 so the share price should settle around 240p for now.

From the last results
The performance of the front book of mortgages remains extremely strong, reflecting the continued strength of the Bank's underwriting and lending criteria. From more than 21,500 loans totalling £4.2bn originated organically since the creation of the Bank in February 2011, there were only 48 cases three months or more in arrears as at 31 December 2015, with a total value of £5.1m and an average LTV of 56%.

The equity in the business is roughly £320m against a loan book of roughly £5b which is over 6% for foreclosures to wipe out equity which i doubt given the current level of employment in the UK, even allowing for a recession.

My guess would be there'll be no immediate movement in interest rates as a cut would just exacebate the difficulties on exchange rates so the NIM will remain pretty stable in the short term.

These are pretty grim figures which i doubt will materialise. Back in march 2015 after the results were released with 21p eps the share price moved from around 210p to 280p. The current fall is well over done.

woody

[adamb1978] 27/6/2016 17:15

I think you have the wrong board. 19p?