IN FO­CUS: BAR­CLAYS ‘ ITS PRICE COULD SOAR AND IT WOULD STILL BE DIRT CHEAP’

The Daily Telegraph - Your Money - - INVESTING -

Bar­clays has a lot of cash and is in­creas­ing its div­i­dend, while there are in­di­ca­tions that it will start buy­ing back its own shares quite soon.

It has taken some time to clean up the mess of pre­vi­ous man­age­ment, which was mired in scan­dal, and over the past decade earn­ings have been di­luted by fines. We now have a new top brass in place and legacy prob­lems are dis­ap­pear­ing with fines be­ing set­tled, mean­ing fu­ture earn­ings won’t be ham­pered.

There are two prin­ci­pal busi­nesses: the re­tail bank and the in­vest­ment bank, plus Bar­clay­card. Some peo­ple avoid the stock be­cause of the risks in­volved with the in­vest­ment bank, but it is now turn­ing it­self around and we are see­ing good re­sults.

The bank has also at­tracted the in­ter­est of ac­tivist in­vestors. While we may not al­ways agree with what they say, hav­ing an ac­tivist help­ing to steer the busi­ness along is no bad thing. If we get some cer­tainty on Brexit this stock could go up by 10pc, 20pc or 30pc – and even after that I would be say­ing it’s cheap.

We have held it for three years and have been build­ing up our po­si­tion, adding quite ag­gres­sively in the re­cent sell-off. be­cause we don’t think they can at­tract a new, younger cus­tomer base, for ex­am­ple. CDs, books and DVD shops are be­ing cru­ci­fied by the likes of Ama­zon.

But we do like com­pa­nies such as DFS, which has a large mar­ket share of the sofa and fur­ni­ture sec­tor. When you buy a sofa you still want to go into the shop: your part­ner wants to see it and sit on it, and you can’t do that on­line.

What have been your best and worst in­vest­ments?

DS Smith, the pack­ag­ing com­pany, has been our high­est con­trib­u­tor. It has great man­age­ment and pro­vides all the Ama­zon boxes in the coun­try.

Coun­try­wide, the es­tate agent, is a stock we sold out of. It couldn’t over­come its demons, had poor man­age­ment and book­keep­ing and was un­able to com­pete along­side on­line dis­rup­tors.

How are you paid?

A ba­sic salary, a share of a man­age­ment fee and a per­for­mance fee when we out­per­form.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.