Paragon Banking Share Discussion Threads

[the drewster] 18/11/2010 08:22

Needs to breach the recent 170ish high, or better still the intra-day 188 high for blue skies.

[the drewster] 12/11/2010 10:11

Lower highs, so lower lows would signal a new down trend.

[future financier] 05/11/2010 15:49

Am i missing something - what decision this afternoon?

Still - doesn't appear that 170 is on the cards this pm now!

[the drewster] 05/11/2010 15:11

A close above 170 would make this afternoon's decision soemthing special!

[future financier] 05/11/2010 14:53

Rental yields are very high at present as prices have stabilised/fallen and rents have risen - so that part of the equation is solid. And like of supply of mortgages should increase the margin .........?

[the drewster] 05/11/2010 13:27

"Return to former levels of profit" ... I suspect margins will still be difficult to increase too much, the risk reward model for landlords is hardly compelling even after a near 20% cut in property prices, only by getting their hands on cheap money can they make the investment case?

150 seems to have held, I may take a long position leading up to the results at the end of the month. Spreadbet only with a tight stop!

[future financier] 05/11/2010 11:50

TD - I'll try to do a full analysis at some stage - but first a minor correction - annual divi will probably come in at 3.6p (maybe more) - however I accept that that does not alter the substance of your point.

I would certainly not say this is a "screaming buy" - I am merely looking for an uplift of 20-30% from current levels in the short-medium term. Longer term I would certainly see myself continuing to hold some PAG as the withdrawal of competitors from the BTL market (Northern Rock, Bradford & Bingley and, critically , all the US owned companies) should enable PAG to return to former levels of profit over a 2 - 3 year timescale. Over a similar timescale I would expect them to re-commence share buy-backs at the same time as boosting the divi.

Finally - I see this as a fairly safe company with few real trading risks to the downside (although this does not prevent share price movements) - so I can see combined returns of over 20% p.a over the coming years - and I am happy with that.

[the drewster] 04/11/2010 11:52

Last year's 54.3m profit delivered 13.9p EPS, 2.2p div, and claimed NAV of 221p, up from 209p a year earlier.

The pre-close statement suggested profits will beat the 59m forecasts, so up 14%+ on last year.

At a push, that could mean up to 16p EPS, divi probably around 2.5p, and NAV is anyone's guess though may have grown given the 200m+ worth of redemptions if they managed to buy some more cheap debt back.

Still not screaming out to me as a buy FF, so perhaps you can add you tuppence worth as to why they should trade higher?

[the drewster] 03/11/2010 12:19

Normally some fairly significant movement leading up to results.

Question is whether 150 hold, in which case a short term long would be the call, or if it fails to hold, in which case short would be the order of the day. Decisions decisions.

[future financier] 03/11/2010 11:15

I'm not - just know people who are - and they are not complimentary about new sales process!

[the drewster] 03/11/2010 10:57

Didn't realise you were a broker FF ! ;-)

[future financier] 03/11/2010 10:48

Trust me - they have screwed up big time! - but this will have had absolutely no effect on last year results - and I assume they will sort it out soon and the affect on 2010/2011 results should be negligible!

[the drewster] 03/11/2010 10:33

They haven't screwed up their relaunch per se, I just think the whole market is very cool just now, and the products just not appealing enough.
Results due soon, for the directors to big up how well they've done, but not only to justify a few hundred thousand more nil paids you understand ...

[future financier] 02/11/2010 16:01

You've been right so far TD - but don't leave it too late to get aboard - I still stand by my year end targets ............ despite the fact they have screwed up their re-launch.

[the drewster] 02/11/2010 08:55

150 new resistance level, next support 125.

[the drewster] 22/10/2010 10:58

I'm not sure about year end targets, a lot will depend on the November statement giving clues to current activity and market apetite for the products.
I would be tempted at 125 though, probably with a tight stop in case things turn sour for UK PLC, but would hope for a reasonable return from those levels.

Not tempted at 150 for now.

[future financier] 22/10/2010 10:05

Maybe - but still believe year end will be around the 185 mark

[the drewster] 21/10/2010 12:17

150 or 125 to be tested?
Might be tempted if drops to 125 without falling through it.

[future financier] 18/10/2010 10:07

Interesting ........

Key appointment made at Paragon
Monday 18th October 2010

The Paragon Group of Companies has appointed Peter Shorthouse as director of treasury and structured finance.

He joins from UBS where he was head of European securitisation, and will spearhead Paragon's residential mortgage backed securities strategy.

The appointment follows Paragon's return to new lending in the buy-to-let mortgage market, with its plans to arrange term funding in the mortgage-backed securitisation markets once it has aggregated a suitable portfolio of loans.

Paragon is a pioneer of securitisation in the UK mortgage market, issuing its first deal in 1987. It has completed 53 RMBS deals in total, raising £20 billion.

Shorthouse has over 20 years' experience in the securitisation market and was instrumental in its development during the 1980s.

He said: "I'm joining Paragon at a very exciting time: there are multiple opportunities for a company with our skills and resources.

"Buy-to-let mortgage lending has recommenced and the securitisation market is beginning to find its feet after two years of uncertainty. We plan to re-enter the securitisation market in due course, consistent with Paragon's long-term growth strategy."

[the drewster] 04/10/2010 20:20

Down over 10% from the "peak on news".
Anyone would think some people were privvy to information before others, how very odd.

[the drewster] 29/9/2010 12:34

Very limited upside from here until the securitisation markets show what the long term funding will be priced at (when they have utilised the warehouse, which could take any amount of time).
If they can get a deal away, what will the rating agencies make of it, and what then will the price structure be... plenty of hard work before the good times return, though I am quite sure the directors will continue to reward themselves very handsomely.

[future financier] 29/9/2010 11:57

I agree TD - the £230m contraction was rather larger than I had expected and the profit guidance is also fractionally lower than I had expected. Hence my setting a price range of 165 - 200. I still believe there will be a small uplift over the weeks to come as the market at large cottons on to the re-emergence of PAG into a market where it has only very limited competition.

[the drewster] 29/9/2010 10:29

Even at 60m profit, the PE would be c.12
The update, while trying to appear overly positive, hinted at the work which will be required to stop the book contracting further over the coming 12 months.
Surely plenty high enough for now.

[phillis] 28/9/2010 12:11

back in business at last

[future financier] 28/9/2010 09:29

I can see this trading in the range 165 - 200 for a while to come - so limited upside or downside at present. Only thing that could change this is if some foreign (Chinese??) banks decided they wanted a piece of the UK mortgage market in which case this is the best (only??) way in and a price of 275 is possible. Don't see this as too likely so I will probably take some of my chips off the table (this share is now almost 50% of my direct investments - so am very heavy on it!).