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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Osb Group Plc | OSB | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
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|---|---|---|---|---|
| 5.20 | 1.31% | 402.40 | 16:35:24 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 396.60 | 396.00 | 403.20 | 402.40 | 397.20 |
| Industry Sector |
|---|
| BANKS |
| Top Posts |
|---|
Posted at 07/11/2024 07:32 by aishah Paul Scott's take pre mkt open yesterday:Paul’s quick view - a forward PER of 4.1x, and a well-covered dividend yield of 9.5%, plus a strong balance sheet (P/TBV is only 0.6x) make this share very attractive to value investors. |
Posted at 23/9/2024 09:12 by pj84 Threadneedle: OSB Group deserves moreInvestors are overlooking the fact that OSB Group (OSB) is trading profitably and focusing on short-term volatility, says Columbia Threadneedle’s Julian Cane. The Citywire Elite Companies AA-rated challenger bank is a top 10 holding in Cane’s CT UK Capital & Income (CTUK) trust, where it makes up 4.4% of the £380m portfolio. The trust’s performance was ‘adrift’ in August, which was ‘entirely down to the performance of one of our larger holdings, OSB Group,’ said Cane. ‘Its share price had been very strong – up 20% in July – and was so perhaps a bit over-extended into results, which proved to be disappointing, leading to the share price falling 26.5%,’ he said. Despite the poor results, Cane said the group is ‘trading profitably – indeed more profitably than mainstream banks’ but ‘many investors are very focused on the volatility of short-term warnings’. ‘While frustrating, we continue to believe that the attractive returns generated by OSB Group should be more highly rated,’ he said. The shares softened 1.4% to 378.5p at the end of last week. |
Posted at 17/8/2024 19:00 by popit apple53Yes these are all risks for Halyk Bank but I think that it will still reward investors in the long term as they are the dominant bank in a country which is likely to see huge growth in future years STB is also excellent value but the progress is fairly slow and the 3.5% dividend is disappointing as they could quite easily afford to pay at least twice the dividend for a dividend yield of over 7% You said earlier that : “OSB above £5 was trading at maybe a 60-70% PE premium to STB” What figures are you using here? I have 2024 basic eps for OSB of about 90p as the first half of 2024 was about 45p And 2024 basic eps for STB of about 134p as the first half of 2024 was about 67p So these figures at current share prices give a 2024 PE of just over 4 for OSB and a 2024 PE of just over 6 for STB When OSB was £5 the PE would have been about 5.5 Where do you get the 60-70% premium for OSB ? They both look very undervalued now and they are both vulnerable to any takeover bid at a 50% premium to their current share prices |
Posted at 15/8/2024 10:40 by brucie5 Not sure which of you reads post on Stocko, but there have been quite a few this morning, including this one, which seems quite knowledgeable, and I will quote anonymously:-------------------- Bizarre reaction to Osb (LON:OSB) interims this morning imo. I don’t think investors actually understand this business - it is a cash machine and even if they made no more loans (let alone growth) would throw off tons of cash every year for a long time. And yet it trades down 20% sitting on a PER of 4 paying a dividend yield closing in on 9% and with another £60m of buy backs to do whilst generating lots of cash Unlike other banks it has a cost to income ratio in the 30%s, CET is strong at 16% and has no offshore, difficult to understand/value illiquid type assets sitting off balance sheet. Loan book is still growing. I can only think that some investors are focussing on borrower behaviour switching quickly to fixed term but any change to that model (a) has no cash profitability impact - it’s just an earnings recognition and (b) is likely to revert in a year or two creating bumper earnings (but again non cash impact). Anyway hey ho. |
Posted at 09/3/2024 06:05 by popit apple53Thanks for the reply Yes there is a chat here on advfn for Halyk but there has only been one post from one poster last year and unfortunately there was no reply They are probably off the radar for the vast majority of investors because of the location and geopolitical concerns I read various Substack articles and recommendations on Halyk such as this one last year and the valuation seemed to be very good with a forecast PE of less than 3 and dividend of over 15% Capital ratios also seem to be fine at over 18% They dominate in their local Kazakhstan market with about half the population as customers and the economy should also benefit from huge future growth given the strategic location in Central Asia and good economic relations with all countries including western countries and BRICS countries The share price has doubled since the lows of 2022 but I see no reason why it should not double again to about $40 and higher I think OSB and STB also look great value but it is difficult to find a better value bank than Halyk hxxps://moderninvest |
Posted at 02/3/2024 20:07 by apple53 I posted something on the STB chat in response to some intriguing points.You might thing it arrogant but someone might find it useful if I repost here. AND I would find it useful if anyone wanted to argue or add. Some of my knowledge is out-of-date, and some of my numbers merely educated guesses. Here goes: QUOTE I agree this is a great opportunity for investors. I don't agree with your view on rates or growth etc., and I wrote the following to remind myself of history and the investment case for these banks. Higher rates tend to benefit earnings, though much higher rates are typically thought likely to increase bad debt charges. Materially higher rates and a high recession risk is normally enough to hit multiples. [it is important you don't have silly regulators that require you to buy reams of government bonds at low interest rates - this is what killed SVB and, arguably, First Republic]. Overall, though, there isn't really any correlation between rates and multiples. 'Any growth' doesn't tend to drive the share price violently up. Balance sheet growth requires capital, and more than it used to under Basel 1/2. In the case of STB the drive for rapid growth probably hit the share price, as it required a dividend cut, and also because some shareholders are rightly scared of rapid growth in bank balance sheets. One of the clearest correlations (with causation) in banking is rapid growth and subsequent high (sometimes disastrous) bad debts. Bank investors 'normally' like modest balance sheet growth, faster growth in fee income, a low level of dealing income and an expectation of a falling cost income ratio. Historically, banks have traded at 8-15x forward eps. It is only in the past few years that 5x earnings has been considered normal, and this in Europe, but not the US, where 9-12x is more typical. What is doubly weird about the ridiculously low multiples is that UK banks are much much safer than they used to be. Equity capital ratios are 2.5-4x higher than in the noughties. [There is a downside to this - RoEs are lower, and incremental growth needs more incremental capital]. They are also encouraged to ex-ante provision (which is good as it helps to smooth provisioning across the cycle). Overall CoE should be lower. None of this means that banks are immune to property market collapses. Some (US) banks are over-exposed to commercial property (NYCB). This has been the cause of most bad debt crises (as opposed to the liquidity crisis post-Lehman). Resi mortgages are also at risk from a big increase in unemployment, double digit interest rates, 40% falls in value (each in isolation) or a milder combination of the 3. The other risk to banks is social media, which magnifies problems that used to swept under the carpet, such that issues which might have been manageable with a couple of year's retained earnings can now be enough to cause a run. STB is probably the weirdest example (and could be the cheapest bank in the developed world), but OSB stands out even more. STB is tiny; OSB merely small. STB is building a growth track record; OSB already has one. STB is modestly profitable; OSB is very profitable (for a modern bank). STB is modestly at risk from an increase in bad debts; OSB is highly cushioned - it has SUCH a low cost income ratio that its leverage to an increase in bad debts is almost the lowest in the industry. If it was 10x the size and based in the US it would trade at twice the valuation or more. I have no idea when this situation will 'normalise', but in the mean time these banks need to buy back their stock (and I would happily forgo some yield to fund this). UNQUOTE |
Posted at 14/11/2023 19:24 by pj84 We sold this bank, then the shares lost 25pc – now we’ll buy againQuestor share tip: buy-to-let specialist does not deserve to be lumped in with lowly valued high street giants By Algy Hall 13 November 2023 • 6:00am In March, Questor advised readers to sell OSB and was right to do so – shares in the specialist buy-to-let mortgage lender have lost a quarter of their value since. This column is relieved to have sold before a profits warning in July that sent OSB shares tumbling. The lender disclosed a £180m hit because mortgage borrowers were refinancing more quickly. Broader investor unease about the banking sector, which prompted our advice to sell, has meanwhile persisted. Now, however, we’re recommending the shares again, guided by the investment decisions of some of the world’s best-performing fund managers. Ten of these professional investors – each among the top-performing 3pc of the 10,000 equity fund managers tracked by the financial publisher Citywire – own shares in OSB. As a result the stock is rated AA – just below a top AAA rating – by Citywire Elite Companies, which rates companies on the basis of their backing by the best-performing fund managers. What’s more, many of those investors have been adding to their stakes over the past few months. They include Matthew Tillett, who bought more shares for his Premier Miton UK Value Opportunities fund in July. Tillett took over the fund in November last year after delivering four times the market return over three years on the fund he ran before. He told his investors that shares in specialist lenders such as OSB were trading on valuations as low as those of Britain’s biggest banks, yet they were “less dependent on the interest rate environment to sustain high levels of profitability” Trading at just 0.6 times forecast book value, shares in OSB are close to the cheapest they have ever been on that measure and 30pc cheaper than when we advised readers to sell in March. A forecast dividend yield over the next 12 months that stood at 7.1pc when we sold has meanwhile climbed to 9.9pc – a level that suggests the market expects a cut. But a trading update earlier this month indicates that the bank may be putting its problems behind it. There was no worsening of the situation that caused that big hit to profits from earlier in the year, when OSB was burned by borrowers spending less time between fixed-rate mortgages on stop-gap “reversion&rdq Reassuringly, it left unchanged guidance for this year’s underlying “net interest margin” – the difference between the interest rates a bank earns on the loans that it makes and the rates it pays to depositors – at 2.6 percentage points. That would mark a recovery from the first half of the year, when the hit to profits resulted in a slump from 3 percentage points to 2. That’s not to downplay the difficult trading conditions for banks and the particular challenges posed by the buy-to-let market, in which OSB specialises. With interest rates starting to plateau, heightened competition between banks is curtailing rates on loans while the rates banks need to offer to attract depositors are rising. Increasing bad debts after the surge in mortgage costs, coupled with the impact of tightening regulation on the buy-to-let market, are adding to investors’ fears. But OSB appears to be coping well with the pressures. Alongside the maintained net interest margin guidance, the bank reported a 5pc increase in deposits in the three months to the end of September. But the biggest positive from the third quarter was lending growth. OSB reported that in the first nine months of the year it had achieved 7pc loan growth. This was previously the target for the whole of 2023 and guidance for the year has now been raised to 9pc. Its ability to win market share thanks to its specialist focus is a key long-term attraction. It is also a reason to think it could weather tougher markets better than most as the specialist focus is reflected in the bank’s strong reputation for risk management. On this front, there’s reassurance from low levels of problem loans and average rent-to-interest cover of 178pc on OSB loans and 154pc for its Charter Court Financial brand, which accounts for about 45pc of gross lending. Meanwhile, a scarcity of rental properties makes landlords well placed to pass rising interest costs on to tenants. OSB’s resilience should also be helped by its bias to professional landlords who use corporate structures to secure tax and property management advantages. This buy-to-let specialism keeps costs down compared with mainstream banks. OSB expects its costs to amount to around a third of its income this year, compared with more than half for many larger rivals. The branchless bank’s low-cost model underpins its attractive levels of return on tangible equity. Even after the profit hit in the first half of this year, analysts expect the metric to reach 15.2pc in 2023 before rebounding to the high teens from next year. It is not hard to see why, following the slump in the shares this year, top fund managers are betting that OSB’s valuation offers protection from further share price falls and the potential for significant gains should the third-quarter results prove to be a taste of things to come. Questor says: buy Ticker: OSB Share price at close: 347.2p |
Posted at 03/10/2023 13:07 by apple53 I wonder if there is an element of anticipation of end of buybacks. I wonder if they can find some more cash, NB this from half-year statement"The Board is confident that the Group’s strategy and proven capital generation capability can support both strong net loan book growth and further capital returns to shareholders." 3x forward earnings. 24 and 25 forecasts have NOT been cut, despite a) 23 profit warning, b) knock-on effect of the type of issue that caused profit warning, ie there should be lower revenue recognition on new mortgages, c) increase in funding costs, etc. So either analysts are dopey and we have some cuts to come (which are just a teensy bit priced in), or..... In any event it would take a massive earnings hit to justify £3. What it comes down to is that there is no marginal buyer. Too small for institutions, and retail investors may not understand the impact of an extremely low cost income ratio (ie much less bottom line impact from bad new). Charter Court deal was prescient I guess otherwise they would be even further from the radar screen. Well I've just increased my position by almost 50%, and so I've repurchased more than I sold between 4.6 and 5.6. Extracted the cash from ICGT, which has recovered modestly. Admittedly ICGT remains very cheap (30%+ discount), but OSB is at a 50-70% discount to 'fair value', and the PE investment trusts seem to be oscillating between 30 and 45% discounts at the moment. Remarkably, I sold ICGT at a profit. I suppose OSB could get taken private. Can anyone make a guess for a takeover? |
Posted at 08/9/2023 17:11 by pj84 Key statsMarket capitalisation £1,442m Dividend yield 9.36% OSB profit warning reaction may be ‘excessive&rsq Share price falls in buy-to-let lender OSB Group (OSB) could be ‘excessive&rsq Moss holds the challenger bank in his £117m CT High Income (CHI) investment trust but said it had been a ‘key reason for the portfolio lagging the market’ in August following a profit warning. ‘The update described positive current trading for the company but did warn there would be a substantial hit to this year’s profit as a result of the rapid rise in interest rates,’ said Moss. The bank highlighted the rapid interest rate rises, which have changed borrower behaviour. ‘The move away from floating towards fixed interest rates is less profitable for OSB, hence the profit warning,’ said Moss. Citywire Elite Companies AA-rated OSB has indicated that the impact is likely to be around 30% of last year’s profits, or less than 10% of market capitalisation of the company pre-warning. ‘The loss should largely be restricted to this year, which, if true, would make the fall in the share price excessive,’ said Moss. ‘However, after an upset of this scale and nature, it would only be natural for investors to demand evidence of a successful recovery before reassessing and rerating the shares.’ OSB Group shares were trading at £3.22 on Thursday. |
Posted at 10/8/2023 13:02 by parob Very nice move and I think much more to come in the near future as the market digests the interim results and realises the drop was overdone a month ago. Dividend investors jumping aboard. |
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