ASX Shares A Closer Look at the Big 4

Round 7 hearings
Round Seven starts in the morning ,and as some see the other side isn't massive shareholders failure just name-- dropping and the blame game..

https://financialservices.royalcomm...scripts-2018/transcript-21-september-2018.pdf

 

@willair more buying opportunities

 

Hard to say, and depending on what comes out this week as ivé been told one needs to keep reminding oneself
of the obvious in 2 years time most of the 6 banks I invest in will all be back above the numbers they were prior to the ""R-C""..IMHO..

 

Two years would be wonderful. I had thought a little longer and that prices would pick up when housing market does.....

 

@Alex Straker has been very accurate in his forecasting and very generous to share his research here. I think he has been suggesting caution from about now until we see what happens??? I am a long term investor with a long memory. I remember CBA was around $60 in December 2007 and around $30 in December 2008 ($26 in early 2009). I remember NAB was around $41 end of 2007 and $18 end of 2008 ($15.73 early 2009). I remember the other banks and many other stocks too but you get my drift. Some times things can change very quickly. I am going to wait and see what happens between now and early to mid next year before putting any new money into the market and only then if market conditions are more positive.

 

Important Big 4 Update - opportunities coming next year

Well they have been royal-ly smashed but are they going to stay down forever?

NO! Of course not, banks will re-gather their strength and go back to their core business, this could actually increase profitability longer term especially if one or two of them wake up to what customer care and service actually means (yeh yeh I know....I'm dreaming!! lol). Perhaps the 'high growth era' of the past may not be the same for these monoliths going forward, however as dividend paying and profitable businesses they will remain attractive.

So here are the next potential opportunities to be aware of.....

Feb 2019 (allow month either side) is the next key timing area for banks, see monthly charts for more details and buy levels of interest. Will be able to define this timing better on weekly and daily charts when closer to mid Jan 2019









No advice

 

Yes

 

Yes as in yes that makes sense!

 

Chart updates,,,,most coming in to the ideal zone around the right time Sniffing around for bargains ATM.


No advice

 

Wait til Feb after royal commission findings?

 

Timing lines indicate Feb as most likely month for the low They would rarely be more than a month off.

 

With that time line we are looking at both Royal Commission recommendations and further clarity on China & US trade negotiations...

I don't think the Australian bank's will have significant profit erosion, at most they will see some low growth over the next few years. The current pricing (this past week has seen some price rebound) still provide a good dividend stream and P/E is still good.

What are your thoughts?

 

I had been wondering the same. It makes sense prices fall a bit when CBA goes ex dividend in Feb. But lots of optimism building and talk of how banks are undervalued.....

 

Agree with all that you say.....my feeling is most bad news is priced in already and we may may see one more 'fear move' but it's probably not going to get much better for buying than this with the banks. Not expecting a roaring recovery either, more of a resumption of steady growth. If the low does turn out to be around Feb this could well prove to be the best time to buy this year.

The main clue of a 'final' low will be a massive volume spike on 1 or 2 trading days, this would commonly happen as price spikes lower and then bounces up immediately rejecting a support level.

I do expect the indices to have another low around late 2019/early 2020 but I also suspect the banks may have somewhat recovered by then and the Feb low is less likely to be taken out than it would be for the indices.

 

Really feeling regret not getting in NAB at $22.80

 

Why... I'm reading @Alex Straker charts showing they're heading $20 in the next month?

 

Appreciate your faith in my work

I hope NAB drops this far but no guarantees that's for sure!

 

I don't feel the fundamentals warrant the low range on the trend model. NAB is majority Business exposed and only have roughly 1/3 of their loans as mortgages.

P/E at around X11-X12 for a major bank and a gross dividend of 12% currently... unless there is a big downside in our economy and a view that neutral interest rate will move up dramatically. If this scenario occurs, there are plenty shares on the ASX that are way overpriced then the major banks.

I believe in your model! I don't believe in the behaviour of the current market in reflecting fundamentals of the bank business. Love to hear contrary views to my though.

 

From The Fool Jan 8th

Based on the current share prices and trailing dividends, these are some of the biggest yields on offer:

Bendigo and Adelaide Bank Ltd (ASX: BEN) has a grossed-up dividend yield of 9.2%.

Bank of Queensland Limited (ASX: BOQ) has a grossed-up dividend yield of 10.9%.

MyState Limited (ASX: MYS) has a grossed-up dividend yield of 9.1%.

Australia and New Zealand Banking Group (ASX: ANZ) has a grossed-up dividend yield of 9.2%.

Commonwealth Bank of Australia (ASX: CBA) has a grossed-up dividend yield of 8.5%.

Westpac Banking Corp (ASX: WBC) has a grossed-up dividend yield of 10.5%.

National Australia Bank Ltd (ASX: NAB) has a grossed-up dividend yield of 11.6%.

NAB, Westpac and BOQ all offer grossed-up yields of more than 10%. That’s a huge starting yield. I can see why retirees are so attracted to the banks for income.

However, those yields are historical and are reliant on earnings to be maintained. As Telstra Corporation Ltd (ASX: TLS) has shown, some companies may cut their dividends.

 

@Alex Straker looks like we are possibly approaching the levels you discussed for Feb/March or is it a bit early? Would love to hear more about what you envision come after this...