Barclays PLC (ADR) (NYSE:BCS)

CAPS Rating: 3 out of 5

A United Kingdom-based financial services group engaged primarily in banking, investment banking and asset management and risk management.

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Member Avatar elcid24 (73.71) Submitted: 10/16/2014 12:59:26 PM : Outperform Start Price: $13.37 BCS Score: +2.65

From 1994 to 2009 (a 16 year period) Return on Equity ranged from 13-26% every single year. The average ROE during that same time was about 18%.

However, the past 4 years have not been kind to BCS. Annual returns on equity have been 7, 6, 0, and 1%. As a result, Barclays is being valued at less than 60% of book value.

In an interview with Barron's about a month ago, Richard Pzena highlighted his interest in large banks trading at depressed values. He was quoted as saying: "We're trying to buy stocks that are generally depressed because something has gone wrong in the business. These companies are under-earnings versus their historical norms...If earnings return to normal, some of these banks could potentially double. There's nothing better our there in the market place."

While Pzena was specifically referring to Bank of America and Citigroup, I think the same can be said of Barclays right now - especially now that BofA and C are trading at P/B ratios of about 0.8, while Barclays is trading at a P/B below 0.6. As Pzena said, if earnings return to normal, and Barclays can return to earning 13-16% returns on equity again, Barclays should be trading at a large premium to book value. A P/B of 1.5 would represent about a 170% appreciation from current levels - a best case scenario, but a possible scenario, for sure.

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Member Avatar asilverp (52.52) Submitted: 9/17/2014 7:28:22 PM : Outperform Start Price: $15.41 BCS Score: -3.66

negative enterprise value.

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Member Avatar Augustus144 (< 20) Submitted: 8/12/2014 12:50:35 PM : Outperform Start Price: $14.64 BCS Score: -2.55

large cash position; value

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Member Avatar pchop123 (80.30) Submitted: 6/26/2014 11:35:46 AM : Underperform Start Price: $14.58 BCS Score: +1.51

suit exposure

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Member Avatar rrwwss49 (< 20) Submitted: 6/7/2014 3:02:22 AM : Outperform Start Price: $16.26 BCS Score: -12.03

Tighter controls are coming

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Member Avatar jantony345 (< 20) Submitted: 4/12/2014 12:08:41 PM : Outperform Start Price: $15.64 BCS Score: -15.52

I think Barclays is realigning, their legal issues are behind them and the stock price is recovering from the 52 low of 15.32

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Member Avatar gallagherr85 (< 20) Submitted: 3/26/2014 9:34:04 AM : Outperform Start Price: $15.48 BCS Score: -11.95

It's stock price is being beaten up by bad news on the market with all of its lawsuits. If they can make changes this year and drive down efficiency, they could be a top player in upcoming years.

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Member Avatar DrGoldin (99.70) Submitted: 3/11/2014 8:54:43 PM : Outperform Start Price: $15.37 BCS Score: -11.71

When you're talking about a $64B market cap company with a forward p/e of something like 6, it looks like a pretty obvious long call.

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Member Avatar athaman (< 20) Submitted: 1/22/2014 2:51:28 PM : Outperform Start Price: $18.13 BCS Score: -28.08

As european regulators ease and finical markets stabilize, Barclays should be able to focus on growth.

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Member Avatar paek813 (99.69) Submitted: 7/8/2013 1:41:10 PM : Outperform Start Price: $16.98 BCS Score: -37.17

s&p 4 star

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Member Avatar Chemdawg (26.68) Submitted: 12/26/2012 11:03:26 PM : Outperform Start Price: $16.43 BCS Score: -53.09

stronger european bank...debt less than 1...dividend in excess of 1% forward PE less than 10...lots of monetary easing going on in the world.

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Member Avatar izvesti (< 20) Submitted: 5/26/2012 1:54:45 AM : Underperform Start Price: $10.85 BCS Score: +14.70

reports showing a recession in England.

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Member Avatar CoreAndExplore (79.77) Submitted: 5/10/2012 10:54:11 AM : Outperform Start Price: $12.74 BCS Score: -32.31

The breakup value is more than the current market cap... um yeah it's a buy, especially considering the projected future earnings growth.

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Member Avatar Sidewayzracer (< 20) Submitted: 3/27/2012 6:21:59 PM : Outperform Start Price: $14.85 BCS Score: -43.90

trades at a price to cash ratio of 0.09

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Member Avatar gameguru (32.28) Submitted: 10/3/2011 1:00:19 PM : Outperform Start Price: $8.69 BCS Score: -10.11

Barclays has been lumped in with the rest of the financials as a risky bet. They've shorn up their balance sheet by selling divisions, they are not a member of the Eurozone (though they do have significant exposure there), and the bank is selling for .3x book value, 7.5x earnings, and comes with a 3.5% dividend. More upside than downside here.

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Member Avatar Snagon (< 20) Submitted: 9/10/2011 8:48:54 PM : Outperform Start Price: $8.41 BCS Score: +0.72

Tremendous opportunity to buy a huge bank at an enormous discount. Trading at less than 7x earnings, has been oversold following an avalanche of bad news in Europe and general economic environment.
Unless the Eurozone collapses, this will turn a profit.

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Member Avatar UgolinoII (62.40) Submitted: 9/6/2011 4:00:35 PM : Outperform Start Price: $9.31 BCS Score: -10.23

Financials to lead recovery

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Member Avatar witness1260 (91.64) Submitted: 8/31/2011 12:33:32 PM : Outperform Start Price: $10.47 BCS Score: -22.65

There's a lot of hate out there for the BCS because every year some random team like Boise State or Utah goes undefeated and doesn't get to play for the national championship. So everyone wants a playoff instead. Personally, I kind of like the BCS and don't think there should be a playoff. So that's why I think BCS is going to beat the market.
Seriously, though, I do like this stock. In the financial crisis of 2008, Barclays did pretty well. They were secure enough to make a bid for Lehman Brothers and then buy it out of bankruptcy. I think they know what they're doing and will be fine through the crisis. Honestly, I have no idea how to read a bank's balance sheet because everything is under Other Non-Current, but their debt, while it has increased a lot since 2008, is tiny compared to their massive assets, and they have less of it than similar banks. I also have no idea how a bank has a profit margin, but theirs is almost twice the industry average, which I like in most companies. And their CFO assured the Wall Street Journal that they're in good shape with liquidity, which is what did the banks in in 2008.

Here's the most compelling reason of all: let's say that some horrible calamity did befall the world economy (or even just Barclays) and they were forced to write down everything by half. Literally they just announced one day that they were worth half as much as they were yesterday. They would STILL be trading at less than book value. I don't think they will have to take a write-down like that, but it's nice to know that that's how little investors have valued this company. Eventually the panic will have to stop.

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Member Avatar ajaykc (< 20) Submitted: 8/27/2011 5:16:06 PM : Outperform Start Price: $9.64 BCS Score: -14.72

It has come down from mid-20 to $10. Its like a shirt is selling at half its original price. If you like the shirt then you can't pass this price. It can go further down, then I will buy more if I have capital.

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Member Avatar dbhealy (33.04) Submitted: 8/25/2011 3:46:47 PM : Underperform Start Price: $9.48 BCS Score: +17.26

down the rabbit hole you go!

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