Paragon Banking Share Discussion Threads

[cockneyrebel] 04/12/2012 10:22

Starting to sink in with the brokers now imo - took 24 hours but I suspect the odd broker that was slightly negative here are now fast back-tracking :-)

CR

[mechanical trader] 04/12/2012 08:53

Paragon: Acquisition of Hampshire Trust

Buy-to-let mortgage specialist Paragon Group [LON:PAG] has confirmed that it is in the early stages of considering the acquisition of Hampshire Trust Plc., a subsidiary of National Counties Building Society.

The announcement comes after reports in the weekend press.

Analyst Peter Lenardos at RBC Capital commented: "We believe this would diversify Paragon's sources of funding and make it less reliant on the wholesale funding markets.

"However, we note that there would be a duration mismatch as short-term deposits are used to fund longer-term mortgages.

"Until Paragon provides further details on the proposed transaction, there is no impact to our forecasts or price target."

RBC Capital currently have a 'sector perform' rating on the stock and a price target of 260 pence.

Broker Forecasts three month consensus data highlights that 82 per cent of brokers have a buy recommendation on the stock, 9 per cent are recommending selling shares in Paragon with the remainder of brokers maintaining a neutral rating on the shares.

At 2:44pm: Paragon Group of Companies share price was +2.65 pence at 242.85 pence.

[cockneyrebel] 03/12/2012 23:03

PAG wanted a banking license before the banking crisis, it allows them to get funding from savers I think, rather like they can have deposit accounts.

Originally that was so they could diversify funding but isn't it even more meaningful now we have so many cash strapped banks? Hampshire run savings accounts - it might be a route to becoming a high street bank or at least an online bank as well as providing diversified funding?

The markets had the hots for PAG when they were last talking about getting a bankin license - surprised the response was less today but there's a bit of profit taking going on which migh thave stifled a rally.

CR

[quepassa] 03/12/2012 22:32

interesting.

QP

[tanfastic] 03/12/2012 15:11

I've just found this article on the Broker Forecasts site after reading the Sunday Times article on Paragon buying Hampshire Trust to get a banking license.



They also say 80% of brokers are buys - sound good news to anyone?

[cockneyrebel] 03/12/2012 12:46

2 positive broker notes today:

Paragon Group of... PAG RBC Capital Markets Sector Performer 243.90 240.20 260.00 260.00 Reiterates
03 Dec Paragon Group of... PAG Shore Capital Buy 243.90 240.20 - - Reiterates
----------------------

These will re-rate with a banking license imo.

CR

[mechanical trader] 03/12/2012 11:53

Small bank could be big deal for buy-to-let lender Paragon

Paragon Group, the buy-to-let lender cashing in on the decline in house ownership, is in talks to buy Hampshire Trust.

11:26
by Gavin Lumsden on Dec 03, 2012 at 10:32



Paragon Group (PARA.L), the buy-to-let lender cashing in on the decline in house ownership, is poised to become Britain's newest bank.

Responding to a story in the Sunday Times the company today confirmed it was considering buying Hampshire Trust, a small private bank owned by National Counties building society.

The acquisition would give Paragon a banking licence which it could use to offer savings accounts to its customers. As well as broadening its product range it would also give Paragon another source of funding for its mortgages.

Paragon mostly relies on wholesale markets for its mortgage funding. It was hit hard in the financial crisis but survived the credit crunch after raising money from shareholders in an emergency rights issue four years ago.

The news lifted Paragon shares nearly 2p to just over 242p. The shares have jumped 33% this year but are still well below their peak six years ago.

The shares are held by Jamie Hooper, manager of the AXA Framlington UK Growth fund, who recently told us he thought Paragon was riding a 'fantastic trend' in buy to let as people had to rent for longer before buying their own homes.

Last month Paragon reported full-year pre-tax profits had jumped 16% to £94.2 million. Chief executive Nigel Terrington said it had been able to grow through buying blocks of mortgages from the big banks that needed to scale down their borrowings

[cockneyrebel] 03/12/2012 07:29

PAG confirm talks.

PAG have been after a banking license for the last 6 years to my knowledge - gamechanger for them if they get it imo.

All imo/dyor etc.

CR

[cockneyrebel] 03/12/2012 06:59

Paragon Group of Cos. PLC (PAG.LN), a provider of mortgages and personal loans, is in exclusive talks to buy private bank Hampshire Trust, the Sunday Times reported on its website, without elaborating on its sources.
If the acquisition is completed, Paragon would get a banking license for the first time and would be able to start offering savings accounts to its customers, the report said.


------------------

These will be on the up if they get a banking license imo.

CR

[cockneyrebel] 30/11/2012 17:03

I can still see great support at this level.

Hope you've seen all the earnings upgrades over the past week:



Earnings and divi's being hiked up.

CR

[sat69] 30/11/2012 16:36

I can still see a retrace to 215p

[cockneyrebel] 30/11/2012 15:41

Nice intraday reversal going on - up by the close?

CR

[mechanical trader] 28/11/2012 07:39

PAG PARAGON

27 Nov Paragon Group of... PAG Espirito Santo Execution Noble Buy 241.00 245.50 259.00 338.00 Retains

SP Target 338p.

[cockneyrebel] 27/11/2012 14:02

I've added more here, this is a lovely buy level on the chart imo.

CR

[the drewster] 27/11/2012 10:10

Nice to see the directors awarded a few more nil-paids

[the drewster] 23/11/2012 15:21

You could be right - I really didn't see that one coming!

[cockneyrebel] 23/11/2012 13:25

A retest of that big high soon at this rate :-)

CR

[mechanical trader] 23/11/2012 12:39

PAG PARAGON

J P Morgan

Europe Equity Research
20 November 2012

Paragon Group Overweight
PARA.L, PAG LN

Full year profits modestly ahead of estimate, and a
substantially better dividend ▲
Price: 250p
Price Target: 290p
Previous: 225p
General Financials

Adj. EPS FY (p) 19.6 23.4 23.7 24.4 26.1
Bloomberg EPS FY (p) 19.30 23.00 - 24.70 26.10
DPS (Net) FY (p) 4.0 6.0 5.0 7.0 8.0
NAV/Sh FY (p) 247.6 266.6 284.4 284.6 303.2
Revenue FY (£ mn) 151 170 173 186 195
Pretax Profit Adjusted FY
(£ mn)
81 94 96 99 106
Adj P/E FY 12.7 10.7 10.5 10.2 9.6
Net Yield FY 1.6% 2.4% 2.0% 2.8% 3.2%
Source: Bloomberg, J.P. Morgan Cazenove estimates.

Company Data
Price (p) 250
Date Of Price 19 Nov 12
Price Target (p) 290
Price Target End Date 31 Dec 13
52-week Range (p) 257 - 151
Mkt Cap (£ bn) 0.7
Shares O/S (mn) 299
140
160
180
200
220
240
260
p
Nov-11 Feb-12 May-12 Aug-12 Nov-12

Price Performance

Paragon Group ("Paragon") has this morning released its full year results
for the year to September 2012. The company has reported profits a touch
ahead of our estimate at £94.2m (our estimate £92.8m) and 16% higher
than a year ago. It has also announced a material change to its dividend
policy with the intention of targeting 3.0-3.5x cover over the medium
term. The immediate impact of this is a final dividend of 4.5p taking the
total dividend for this year to 6.0p, compared with our estimate of 4.4p. In
our view, the combination of having secured new funding this year and the
new dividend policy are confirmation of Paragon's recovery from the
travails of the credit crunch, and are likely to be well received by
shareholders. We have both rolled our price target forward to December
2013 and increased it to 290p reflecting the company's return to lending.
We retain our Overweight recommendation.

 Underlying PBT £94.2m v our estimate £92.8m (2011 £81.1m). Q4
profit was £25.3m, 14% ahead of a year ago.

 The company reports that the pipeline of business at the start of the
year is strong supported by the recent securitisation and warehouse
facility. The company reports that to date there have been no arrears on
mortgage lending advanced since October 2010.

 We are making no change to our profit estimates at this stage
although the better than expected performance in 2012 increases
confidence. A lower tax rate implies modest EPS upgrades while we
have increased materially our dividend estimates to reflect the new
dividend policy. We also introduce our FY14 estimates.

 Our price target is rolled forward to December 2013 and increased
to 290p. In our view book value is a reasonable next base for the share
price.
 Analysts meeting 9.30am. 1 Finsbury Avenue, EC2M 2PP.

[mechanical trader] 23/11/2012 12:19

UBS note from wed 21st....

Financial

Paragon (PARA.L) Anton Kryachok............ [phone]
Analyst
[e-mail]

Alastair Ryan...................+44-20-7568 3238
Analyst
[e-mail]
Price (19 Nov 2012)..............241p/US$3.83
12-month rating...............Buy (Unchanged)
12m price target.....Prior:
262p/US$4.17 => 265p/US$4.21
Market cap...................£0.73bn/US$1.15bn
Full-Year EPS
2012E............................... 23.34p => 24.24p
2013E............................... 26.79p => 27.24p

Laying solid foundations for 2013 Strong delivery on key aspects of the business
2012 was another year of strong performance from Paragon: the successful completion of the
new PM17 securitisation, an enhancement of warehouse facilities and robust earnings delivery
from IDEM. These developments leave the group well positioned for a strong performance in
2013, in our view, which to a large degree will be measured by the pace, profitability and credit
q.uality of new BTL lending (UBSe £350m) and an improvement in stated RoEs (UBSe 9.7%). FY2012 PBT 3% ahead of consensus, dividends up +50% y/y
FY2012 PBT came in at £95.5m, +3% ahead of consensus and +4% ahead of UBSe, supported
by stronger than expected Net Interest Income of £157.8m (+3% ahead of UBSe) and better
provisions (£24.1m, -11% UBSe), as BTL loans in arrears for 3+ months declined to 48bps from
54bps in Q3 12. The Board proposed a final dividend of 4.5p per share, taking a total dividend
f.or the year to 6.0p (up +50% y/y) ahead of UBS expectations of 4.5p. Earnings upgrades: +2% to 2013E EPS
On the back of FY2012 results, we increase our 2013E earnings by +2% and revise up our
2013 DPS forecast by +28% to 6.6p to reflect the new dividend policy. We trim down our
f.orecast for new BTL lending in 2013 to £350m (from £400m). Valuation remains undemanding
We increase our DCF-derived price target to 265p (from 262p). The stock is trading on 0.8x
2013E BVPS. We reiterate our Buy recommendation, but remove Paragon from our Mid-Cap
Key Call list, due to a lack of near term catalysts.
-

[uhound] 23/11/2012 12:05

As someone involved in the property industry I know from mortgage brokers that Paragon are busy and "Buy to Let" is of course attracting a lot of interest at the moment.

[mechanical trader] 23/11/2012 12:02

PAG PARAGON

Moving up nicely.

Brokers have some bullish share price targets.....

Stock on a lowely P/E of 8.8 to 2014.

Far too cheap.

Date Company Name Broker Rec. Price Old target price New target price Notes

22 Nov Paragon Group of... Shore Capital Buy 245.15 - - Reiterates
21 Nov Paragon Group of... RBC Capital Markets Sector Performer 245.15 240.00 260.00 Downgrades
21 Nov Paragon Group of... Numis Sell 245.15 - 168.00 Reiterates
21 Nov Paragon Group of... Jefferies International Buy 245.15 260.00 290.00 Reiterates
21 Nov Paragon Group of... UBS Buy 245.15 262.00 265.00 Retains
20 Nov Paragon Group of... Peel Hunt Buy 245.15 288.00 - Retains
20 Nov Paragon Group of... Canaccord Genuity Buy 245.15 313.00 313.00 Retains
16 Nov Paragon Group of... Berenberg Buy 245.15 230.00 280.00 Retains
14

[cockneyrebel] 22/11/2012 17:06

I stopped believing them ages ago. I read what they have to say but never let them guide my hand. I think every broker had a sell on MTC @ 150p, they are all starting to say buy now @ 300p now they have doubled.

Brokers really do get behind the curve - expecting a global slow down I guess - just as China has seen the first manufacturing increase in a year or so.

CR

[yupawiese2010] 22/11/2012 16:35

Another semi negative broker forcast - Paragon the lender to British landlords, lost 1 percent to 238.3 pence after RBC Capital Markets downgraded the stock to sector perform from outperform. A 12-month target price of 260 pence per share was forecast for the stock. The company fell the most in nine weeks yesterday after analysts said its plan to increase dividends is too modest.

Does anybody take any notice of broker forecasts, I gave up years ago.

[cockneyrebel] 22/11/2012 15:45

Numis's clients buying today I guess :-)

CR