Secondary Recommendation

One Savings Bank - Too cheap on prospective PE of 5.6

December 2016

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Latest forecasts from Investec for One Savings Bank (OSB), a specialist buy-to-let (BTL) lender, are for pretax profit of £169.3m this year and £155.6m next for eps of 50.9p and 45.7p, making for a prospective PE of 5.6 and 6.2, which is too low given the rock bottom cost of borrowing and the low supply / rising demand dynamic for property rentals in London & the South East. Buy-to-let (BTL) has been a hugely successful segment of the secured lending sector with the market growing from 840,000 BTL mortgages with a balance of £93.2bn at the end of 2006 to 1.8m BTL mortgages with an aggregate balance of £214bn by the end of 2015 – 17% of the total mortgage market. If nature had been allowed to take its cou ...

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OneSavings Bank (October 2018)

OneSavings Bank (June 2018)

OneSavings Bank - Sector re-rated after Shawbrook bid (May 2017)

One Savings Bank - Challenger bank has Â£300m to make eps enhancing acquisitions (January 2017)

OneSavings Bank (May 2016)

OneSavings Bank - Q3 lending rises Â£548m (December 2015)

OneSavings Bank - Results ahead of expectations (November 2015)

One Savings Bank - Specialist buy-to-let lender growing at terrific rate (June 2015)

With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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