Bank of Ireland Shares- To Buy or not to Buy?

I get a lot of queries from clients and friends about whether to buy Bank of Ireland Shares. I saw some excellent analysis today which gives the full argument from both sides on whether to buy or not. A quick summary of one interesting point below. If anyone wants the full analysis document, email us.

Bank of Ireland are trading in an economy with a very poor outlook for domestic economic growth, yet they are priced at 0.8 times FY13 NAV, with a loss expected for the full year and they still have to deal with all those tracker mortgages. Lloyd, a similar bank, trade at 0.9 times NAV and expect to make a profit of 2.8bn. Go figure!!

Overall, my comments are…

1) I prefer investors to invest in a very broad spread of equities, and not just focus on one or two companies.

2) The only reason Irish investors are so curious about BOI is the familiarity bias. Do you think UK or European investors have such an interest? Probably not.

3) What do we know that isn’t already factored into the current share price by the hundreds of stock market analysts? Probably nothing.

THIS NOTE DOES NOT CONSTITUTE ADVICE. PLEASE SEEK PROFESSIONAL ADVICE BEFORE MAKING ANY INVESTMENT DECISIONS

Dave

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