COMB.X0000 and HNB.X0000

NilangaG · 1 COMB.X0000 and HNB.X0000 Mon Jul 07, 2014 7:14 pm

NilangaG

Manager - Equity Analytics

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Is it worth buying COMB.X0000 at 108 and HNB.X0000 at 130?

WildBear · 2 Re: COMB.X0000 and HNB.X0000 Mon Jul 07, 2014 7:45 pm

WildBear

Assistant Vice President - Equity Analytics

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COMB.X now trading at about 1.5 times it book value which could be a fair value for a non-voting share. HNB.X trading well below it's Book value (BV-around 150). To match the equation, if COMB.X trading at 110, HNB.X should trade above 250, and SAMP above 400.
For that formula SEYB.X is the most undervalued top tier banking stock.

I guess every one would agree that P/B ratoio of 2.0 is a fair value for a well managed leading bank, and above 2.5 looks overvalued. Currently among blue chip banks, Only COMB.N is trading above P/B ratio of 2.0.
I found HNB.N,SAMP,SEYB currently trading slightly below their BV which is very cheap. that's why banking sector rally is well deserved.
We should also keep in mind that during low interest regime their earning and asset base can go up steadily making them more and more undervalued in coming years.

kalum · 3 Re: COMB.X0000 and HNB.X0000 Mon Jul 07, 2014 11:29 pm

kalum

Senior Manager - Equity Analytics

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@ - WildBear- you simply cant compare bank stocks in that manner.

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COMB.X0000 and HNB.X0000

1 COMB.X0000 and HNB.X0000 Mon Jul 07, 2014 7:14 pm

NilangaG

2 Re: COMB.X0000 and HNB.X0000 Mon Jul 07, 2014 7:45 pm

WildBear

3 Re: COMB.X0000 and HNB.X0000 Mon Jul 07, 2014 11:29 pm

kalum

4 Re: COMB.X0000 and HNB.X0000

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