Re: Unjustifiable investor sentiment towards... To put a few figures to the oversell, ALD is now 41% below the peak in July, 28% below the 200day moving average, with a PER of 8.8 and a PEG of 0.52 for 2015. We will know more when the Finals come out on 10th March but in the meantime, despite a series of modifications to gradings by a series of brokers, I believe they represent a strong buy backed up by the arguments - financials here, and overall business ones in my previous posting.The brokers have been reducing their estimates, but none is saying reduce - neutral, equal, hold among the 3 quoted - but I suspect that they will also wait for the finals or a post-close trading update before coming clean in a definitive way.
Unjustifiable investor sentiment towards ALD If one reads the last message on this BB, the vieww is positive. OK not as positive as earlier this year before all the Chancellor's meddling but positive neverthless. Additioinally, on this website I read another article which had a very important point which I had missed and which is included in the passage I extracted as follows:As corporates will have to pay neither the higher tax, nor changes to tax relief announced in the Summer Budget, Barclays thinks more professional landlords will become incorporated as a result.These are the customers that challenger banks are targeting anyway, making up over half of OneSavings Bank (OSB)'s customer base. Barclays expects it could be 45% of Shawbrook (SHAW)'s and Aldermore (ALD)'s clients, This is a key point because although ALD will still be subject to the profits tax imposed by Chancellor, the other elements of extra taxation affecting buy to let only affect say the individual like you and me who may have 1 or 2 lets and removal of mortgage tax relief is key. That will not happen to the corporates, and the implication is that a lot of ALD's customers are already in this category, and many more may become so. Becoming corporate is not the most difficult or costly thing in the world and presumably worth doing to avoid the Chancellor's latest onslaught.So all in all, the sell off of ALD is overdone, and I am pleased to see that in the last few days there has been some recovery. I am sorely tempted to add to my holding, and by the time this is read by many, I may already have done so!I would be following two key directors - significant shareholders, man and wife - , who added £100,000's worth a little while ago at something much higher than today's price and must be tempted to do so again.
NEW ARTICLE: Top pick in the UK bank sector for 2016 "It's been a miserable start to 2016 for global stockmarkets, with fresh concerns about Chinese demand wiping billions of pounds off share prices. Investors were certainly hoping for better after a tough 2015, among them shareholders in challenger ..."[link]
Re: Odd Government is hamstrung. Promote the interests of challengers v the big boys or persuade HSBC not to move their base away. A certain amount of incompatibility there.
Re: Odd Cant remember the exact words of the article in the Sunday version of the Telegraph and have now thrown thew paper away,sorry! However the gist of it was as follows, which will hopefully bring a change of heart and action form the Treasury:.The challenger banks like Aldermore have taken their sitguation to the senior man at the Treasury this week and will be asking for 3 things, which should get some kind of hearing given that the PM not so long ago was looking for more competition among the banking sector, more loans to SMEs etc.1. Make the loan arrangements which been going on for some time now into a poermanent fixture.2. Help with the EU to relax the particularly stringent requirements they are planning to institute.3. Make some changes to their competitiveness versus the bigger banks - thats what they the politicians wanted wasnt it ? - so that the Chancellor's planned profit surcharge is reduced and the reducgtion in the banking levy is reviewed, which makes it a much more uneven playing field for these challenger banks. If they make some progress, then perhaps the recent major shareholders investment in some shares at the ridiculous price of 212p wont be in vain!
Re: Odd Further broker downgrades due to Basel Committee recommendations, I believe. Aldermore is more exposed than other challenger banks, OneSavings Group and Virgin Money. "Under Basel Committee rules, banks have to apply a 35pc risk weighting to residential mortgage loans with a loan-to-value ratio of between 60pc and 85pc. That measure defines how much capital a bank has to hold against the loan to make sure it can deal with a downturn in the economy when more loans might not be paid back. But the new plan would mean doubling that weighting to 70pc if the loan is dependent on rental income. This would, in turn, double the capital that would have to be held against the loan. Such a change would drive up the cost of lending and reduce the supply of buy-to-let mortgages for buyers. This standard model applies to all banks except the very largest, which are allowed to use their own risk weightings if they have enough data to satisfy regulators that they understand the market fully. However, the wider tightening up on buy-to-let does still affect those giant lenders. Banks that specialise in the sector argue that they take prudent risks and should not be hit with yet another round of charges. But the Financial Policy Committee at the Bank of England, headed by Mark Carney, yesterday warned that buy-to-let mortgages are twice as likely to turn bad as loans taken out by owner-occupiers"
Re: Odd So, not a tree shake then. The fall continues, and no bounce today with the rest of the sector suggests an ALD specific concern.Director buys ignored.
Re: Odd Deutsche Bank have reduced their target price to 240p from 275p. The Monks family have put their money where their mouth is, buying into the market today, she with 40000 @ 212p, he 10000 at the same price. I presume this is to demonstrate their faith in the company. Total investment c. £125k.
Re: Odd Looks like it could be a tree shake, but its the sustained fall over the last month that's of concern. What's going to drive it back up with such negative sentiment in the sector?
Odd Why did it drop today?
Re: What The.. Equity research analysts at Deutsche Bank have downgraded their investment rating on challenger bank Aldermore Group (LON:ALD) to hold from buy after the UK government announced an increase in the stamp duty by 3 per cent for buy-to-let mortgages from April 2016.The City heavyweight said: "This change follows the amendment to tax relief for some individual BTL owners in the Summer Budget, and the provision of additional powers to the FPC over the BTL market, after a period of strong growth."Given this latest change, and that we cannot rule out further amendments in the future if regulatory / policy aims on BTL are not achieved, we have lowered our loan growth assumptions for Aldermore, impacting EPS forecasts."The broker has cut its target price to 267 pence per share from 330 pence.At 2:25pm: (LON:ALD) Aldermore Group share price was -11.65p at 233.35p---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------Further downgrades....further SP fall. Considering the company only floated this year I am not impressed with such a U-turn by Deutche Bank. A part of their dowgrade is based on what the government might do next. The desireof both labour and the tories to make money from BTL was known before the float, so this should not have come as such a surprise.
Re: What The.. They want competition but seem intent on scuppering the challengers. The rules aimed at High Cost Short Term lenders is another example as they pose signficant admin requirements on credit providers that could not be further away from the wongas of this world
Re: What The.. A good question.Reuters has this to offer:Virgin Money Holdings UK Plc and Aldermore Group Plc may require more capital if British regulators impose tougher rules to curb the buy-to-let housing market, Bank of America Corp. said. The shares slumped.Billionaire Richard Bransons Virgin Money would be hardest hit if the Bank of England introduces tougher capital requirements on lending to landlords, analysts led by Michael Helsby wrote in a note to clients on Thursday. They cut the lenders rating to neutral from buy, while downgrading Aldermore to under-perform from buy.Virgin and Aldermore are among a group of small British lenders seeking to challenge the dominance of the nations largest banks, which together control as much as 80 percent of the market. While increasing demand and surging prices in the British housing market are helping spur their expansion, a tighter focus from regulators seeking to avert a bubble in property prices could undermine earnings growth.Some sort of underwriting controls is inevitable, the analysts wrote. With the BOEs new focus on buy-to-let and consumer credit, we are increasingly worried about the ability of Virgin Money to deliver.The BOE has signaled that its concerned about the rate of growth in demand for buy-to-let mortgages, which have made up most of the expansion in mortgage lending since 2008 as banks compete for borrowers, often by requiring that only the interest is paid each month. BOE Governor Mark Carney said on Nov. 5 that the central bank is watching the developments of the buy-to-let housing market closely.Virgin Money slumped 6.3 percent to 350.5 pence at 12:18 p.m. in London, the biggest intraday drop since July, while Aldermore fell 6.8 percent to 258.20 pence. Both have gained more than 20 percent this year.
What The.. ?
Re: Good sustained results.... Thanks for that.