SHOULD YOU BUY SHARE IN Legal & General (UK STOCK Analysis )
LSE:LGEN
Due to the recent global issue to the economy has been halted and the stock market has took a major hammering!
Is this the end of the world? Or is this the greatest time to invest in the stock Market?
Legal & General is a FTSE 100 life assurance, investment management and general insurance provider.
It’s not easy to judge the direct affect that this recent global issue will have on Legal & General, but in the companies outlook statement it did say it has “confidence” in its capacity for future growth and paying shareholder dividends.
Indeed, the firm claims to have a “strong” balance sheet, with £7.3bn in surplus regulatory capital, and “significant buffers to absorb a market downturn.”
With Legal & Generals share price at 67% below it’s fair value, could this be a great value dividend stock?
In this video, we shall find out!
LETS DIVE IN!
Legal & General has a high level of cyclicality
It’s shares have been virtually moving sideways over the past five years, despite steady advances in earnings and increases in the shareholder dividend.
Strangely the Legal & General stock behaves a lot like big London-listed bank shares.
How did Legal & General Perform during the previous recessions?
During the 2008 financial crisis the share price crashed by around 80% in the wake of the credit crunch and the recession which followed. It’s share price again acted very similar to the banks. However, also like many of the banks it did bounce back stronger.
Has Legal & General Evolved?
Legal & General is very cyclical, however there latest report explains that over “the past several years”, Legal & General has evolved into a “high growth/high return” business when previously it used to be a “lower growth/lower return” company.
Business Strategy?
How does Legal & General plan to grow earnings?
. Firstly, they plan to focus on large markets where the company has a small market share and where it can outpace the general market growth.
It’s second tactic is to target growth markets where it already has a leading market share and where it can grow by maintaining its leadership in that market.
Recent Challenges?
Short sellers have tried to push down the Legal & Generals price in recently weeks, but it keeps bouncing back up! Which is a good sign.
The share price plummeted by 10% in a week when fear-mongers betted it would follow Lloyds, Barclays and RBS and cancel its 2020 full-year dividend.
However, the CEO Nigel Wilson confirmed he would pay a 12.64 percent final dividend.This £753m loyalty bonus confirms to me that the balance sheet is strong enough to ensure the company gets through these short term issues.
DEEP DIVING INTO THE STOCK! (Screen capture video )
Overall top management teams at Legal & General have confidence in the future of the company. They’ve put their money where their mouth is by completing a large amount of insider share purchases in the company.
The dividend growth also looks set to continue and Earnings per share rose by 16% compared to the previous year.
Over five years, the shareholder payment has increased by just over 50%
And with a P/E ratio of just 6, this offers a large margin of safety. So I did purchase shares in this company.
I WOULD LOVE TO KNOW YOUR THOUGHTS ON LEGAL & General AS A BUSINESS AND AS A STOCK SO PLEASE DO COMMENT BELOW.
Due to the recent global issue to the economy has been halted and the stock market has took a major hammering!
Is this the end of the world? Or is this the greatest time to invest in the stock Market?
AVIVA is a British Institute, as the largest INSURANCE company in the U.K it has over 15 million customers in Britain and serves over 33 million customers across 16 countries.
The Types insurance AVIVA offers range from car insurance to critical illness cover, pet insurance and of course pension plans!
This stock is one the lowest cost in the FTSE 100 right now, so in this video I’m going to give you a full stock Analysis and detail whether it could be a great investment!
As a Teaser, I did purchase shares in AVIA!
LETS DIVE IN!
Aviva can trace its history back to the establishment of the Hand in Hand Fire & Life Insurance Society in London in 1696.
It was created by a merger of two British insurance firms, Norwich Union and CGU plc in 2000.
DEEP DIVING INTO THE STOCK! (Screen capture video )
Overall AVIVA is a Mammoth of the UK insurance industry and a great value stock at this time. It’s past earnings growth of over 60% in the previous year and high dividend of 13% make it an attractable investment.
The risk includes it’s slightly higher debts than liabilities in the long and the recent insider trading sell off’s.
But despite this, the Margin of Safety offered by it’s great price & previous years growth has encouraged me to add this Insurance giant to my portfolio.
Also from a psychological aspect I personally feel that due to the recent global issue, people will be encouraged even more to take out insurance as they have seen first had that anything can happen in this crazy world!
I WOULD LOVE TO KNOW YOUR THOUGHTS ON AVIVA AS A BUSINESS AND AS A STOCK SO PLEASE DO COMMENT BELOW.
Due to the recent global issue the economy has been put into deep freeze, with people spending less and INTEREST RATES at an all time low. Subsequently Bank Stocks have taken a major hammering!
Is the world about to end? Or is this the greatest time to invest in some bargain stocks (PREVIOUS VIDEO CLIP) – ON THE BEACH
If you believe like me that the economy will recover from this global issue as it has recovered from so many recessions in the past then now may be a great time to pick up some bargain stocks!
THE SALE IS ON!
Barclays is an historic British institution which traces its origins back to 1690 when John Freame, a Quaker, and Thomas Gould started trading as goldsmith bankers in Lombard Street, London.
They also launched the worlds first Cash machine in 1967. And the UK’s first debt card in 1987.
There businesses include consumer banking and payments operations around the world. They are also a global corporate and investment bank.
The recent global issue has saw it’s share price plummet by over 75% , Is the Bank doomed? Or Could this be a great turnaround investment?
IN this video I’m going to give you a full analysis of the stock and detail whether this could be a great investment opportunity.
As a little teaser I just purchased shares in the Bank!
LETS DIVE IN
Central banks around the world have unlocked trillions of dollars of funding and liquidity to make sure the financial system holds together in these tough times. So far, these actions seem to be working.
Reduced interest rates and more liquidity will make it easier for the bank to borrow and lend.
How did Barclays perform during the previous Financial Crisis?
In the previous financial crisis the Barclays share price fell to a low around 10% of tangible book value.
So Barclays is nearly as cheap as it was back in 2009, even though the risks facing the group are much lower this time around.
Although the stock price could fall much further before getting better, the stock even at current levels offers a wide margin of safety!
WARREN BUFFETT WOULD APPROVE.
If the stock returns to it’s tangible book value, investors are BANKING on a potential upside of 300%!!!
What is Barclays like compared to other Banks?
Barclays stands out as one of the cheapest shares in the FTSE 100 right now. A true value stock.
There are no other companies that offer more value on a price-to-tangible-book (P/TB) basis.
The stock’s 0.25 multiple is the cheapest in the index.
The Barclays share price is also cheaper than many of the UK’s other banks such as Lloyds and RBS.
For example, Shares in these two companies are dealing at a P/TB ratio of 0.6 and 0.4 respectively. Barclays’ ratio is just 0.25.
FINAL THOUGHTS:
Barclays are likely to suffer some further turbulence in the short term.
But over the long run I believe Barclays will continue to hold its position at the top of the UK banking industry.
Another credit for Barclays is it’s transatlantic presence gives the bank an edge over other lenders here in the UK.
Which really does deserve a premium rather than a discount over other banks.
I will leave you with a banking joke,
A local bank is introducing a cash machine built in to a tree. If it’s successful, they might expand to other branches!!
The travel industry took a major hammering due the crazy global issue and subsequent travel restrictions put in place.
Is this the end of the world? Or is this the greatest time to get some bargain stocks?
Now if you believe that this global issue won’t seriously affect the travel industry in the long term & things will eventually get back to normal. Then now is a great time to GO BARGAIN HUNTING FOR STOCKS!…THE SALE IS ON!)
On the Beach is one of the largest online travel booking agents in the U.K. which specializes in short & medium haul Holidays.
BUT IS THE SUN REALLY SHINING ON THIS STOCK?
In this video I’m going to give you’re a brief overview of the company, full stock analysis and show you why I just purchased shares in the company.
————–Lets Dive in!
History of On the Beach Business?
On the Beach was founded by Simon Cooper, who began his career in the travel industry while at university. There he founded a ski holiday company called On the Piste.
Which was aimed towards groups of students who wished to go on budget-friendly ski holidays to the French Alps by coach.
While simultaneously in 2004, Cooper started working on a new business venture “On the Beach”.
In 2008, TUI Group‘s Thomson Holidays purchased On the Piste and thus cooper decided to focus fully on his new venture.
Prior to this in 2007, private equity investor Livingbridge acquired a majority stake in the company for £36 million.
In 2011 On the Beach expanded further by acquiring Resort Taxis out of administration for just £10,000. This business assisted with transporting holidaymakers in its most popular destinations of Egypt, Turkey, The Balearics, The Canaries, mainland Spain, Greece and The Algarve. The Resort Taxi arm was later re-branded into On the Beach Transfers in 2012
The company continued expanding and founded “ON THE BEACH beds” in 2011.
A hotel organisation which allowed On the Beach to Contact direct with hotels.
This was a great move which allowed them to secure better commission rates and thus improving their profit margins.
———————-
On the Beach UK Business timeline 1
On the beach timeline 2
What about the On the Beach stock?
Evaluating on the Beach Stock shows the business has some great fundamentals.
(SCREEN CAPTURE TALK THOUGH EARNINGS, BALANCE SHEET, growth Potential and Margin of safety.
Online travel stock with minimal overheads.
FINAL THOUGHTS:
ON the beach is a great stock to purchase and the recent global issue means that it can be purchased with a margin of Safety.
But remember on the channel we don’t provide financial advice so be sure to review your own investing goals, risk tolerance and do your own research before investing!
I WOULD LOVE to hear your thoughts about ON THE BEACH as a company, as a customer and of course a stock!
Why you should buy Boohoo Stock? (Full Business Analysis)
BooHoo is a trendy online fashion founded in Manchester, U.K.
Boohoo was originally started by the fashion entrepreneur Mahmud Kamani and Kane back in 2006.
The duo, who had previously supplied other clothing chains & were quick to spot the opportunity to sell online and in just over a decade have turned Boohoo into a £2billion Fashion Empire!
Which is worth 5 times more than Debenhams!
One of the worlds greatest investors Peter Lynch would call this stock “A Fast Grower”.
Now I’ve always avoided fashion stocks as I felt they could be easily replicated. However, after researching BooHoo it’s clear to see that this brand resonates uniquely compared to it’s counterparts.
So in this video, I’m going to give you an overview of the brand, give you a full stock analysis and tell you why I recently purchased shares in Boohoo.
LETS DIVE IN!!
BooHoo?
BooHoo had humble beginnings on a Manchester Market Stall, before growing into a £2 billion fashion empire in less than 10 years!
Now many people over the age of 26 have not even heard of the brand, but it’s styles and outfits resonate massively with teenagers and those in their early twenties. BooHoo has 5 million loyal customers in 200 countries.
There clothes are Instagram favourites appealing to those who wish to wear a different outfit each time they go out.
The clothing is also extremely cost effective with dresses from as little as £3 and shoes from as little as £4!
According to the Umar Kamani, the son of founder Mahmud:
“The philosophy is simple. ‘Girls don’t wear the same dress twice,’ Umar said recently. ‘They want a new item every week. We make sure she can afford it.’
BooHoo USP’s?
One of the principles I look for in a company is that it has a great competitive advantage.
As a budget fashion brand it’s quite difficult to keep a strong USP but Boohoo seems to have many.
OPERATIONS?
From an Operation & supply chain perspective the founders have many local contacts in the Rag Trade and thus over half of their garments are made in the U.K.
This allows them to beat the competition by getting the latest fashion trends from Catwalk to their online store within weeks.
Traditional Garment manufacturers with production in the far east may have lead time of many months.
This can lead to their products been out of date by the time their clothes reach the stores.
Whereas Boohoos fast fashion supply chain tests small quantities of new lines with their customers via social media, using the platforms such as Instagram as a type of voting system.
There they can look at which clothing lines were shared a lot and had the most interaction.
Before ramping up production on the most popular units to scale.
Unlike its more ‘grown up’ competitor Asos, Boohoo sells only its own labels. It’s British distribution is handled from a massive warehouse in Burnley, which holds more than 29,000 pieces of clothing and will expand to 1.9 million sq ft next year.
Design?
BooHoo’s tracks the celebrity market and fashion trends closely, after Kim Kardashsian, Ariana Grande or Rhianna post a new outfit pic. BooHoo will have something very similar of the shelves within 2 weeks!!
They upload 120 new pieces daily onto it’s website and sells 50 dresses per minute!
BooHoo is a true leader in “Online FAST fashion” and even acquired Los Angeles based “Nasty Gal” which is of similar flavour.
Influencer Marketing?
BooHoo has a strong network of Influencer marketers from bloggers to celebrity influencers who have large followings on Instagram.
From the girl band Little Mix, to Love island stars and a host of high end celebrities such as Kylie Kenner who helped to launch Pretty Little thing.
They even roped in the Worlds Strongest man Eddie hall who promotes the “BooHoo Man” part of the fashion brand. Ran by Umar Kamani.
Motivated Employees?
I actually know quite a few girls which work at the brands of Boohoo and Pretty Little Thing (One of it’s subsidiaries).
There have most incredible Christmas & office parties with superstar line ups from Skepta to Aitch and even Fatman Scoop!
Employees can also enjoy free Zumba and yoga classes.
What about the stock?
Reviewing the stock using the Warren Buffett investment method it’s clear to see that the company has great fundamentals.
Earnings grew by over 50% over the past year (Enthusiasim )
And it has projected earnings growth of over 20%!
The company also has a strong balance sheet with greater assets than liabilities.
A companies debt level is a very important factor to check especially if investing during a recession period.
When I purchased the stock it was also undervalued due to the global issue at £1.75 per share. This gave me a margin of safety, when I invested a few weeks back.
Overall,
BooHoo is a modern fast fashion brand which is with the latest trends, has an efficient operational setup and strong celebrity connections which really do help with their influencer marketing.
In addition, the company has great fundamentals and potential for future growth.
———-
I would love to know your thoughts on BooHoo as a business and as a stock.
The recent global issue caused a mass number of international travel restrictions and thus a drop in global oil demand! This in turn sent the oil share price plummeting.
So is now the greatest time to be investing into bargain oil stocks or is the future of the oil industry over??
In these video I’m going to explore these questions and explain how I made £1000 profit in just 7 days.
LETS DIVE IN!
Short term oil prices are dependent upon market Sentiment & relationships between the major oil providers such as Saudi Arabia, Russia and the USA.
However, in the long term Oil prices are dependent on 3 things, SUPPLY, DEMAND and COSTS of extracting and shipping the oil.
GLOBAL OIL DEMAND GRAPH –
Developing nations will demand more oil in the future.
“Over the next 25 years, the world will need an additional 25 million b/d of oil.
Or an Incremental combined U.S and Saudi Arabia Worth of new production.
Demand Growth 1-2% per year.
SHORT TERM OIL PRICES:
The number of oil rigs in the USA and Canada have increased massively.
Thus this excess increase in supply and a temporary drop demand due to the global demand has caused OIL PRICES to plummet.
Thus the risk for investing in oil include.
Risks:
Increase in Supply (New Rigs, USA)
Oil production costs (Shale oil & smaller producers may have higher operating costs)
Disruptive technology such Electric Vehicle technology.
Renewable Energy (Be Conscious of this in the next 10-15 years) and how it will affect oil prices. (Growth at 20-30% per year) (Renewable generation accounts for >50% of power supply post 2035.
The Consensus is gradually turning against oil & fossil fuels.
More Recycling less new plastics required.
Thus to mitigate these risks and still make good returns we need to invest in oil stocks using the Warren Buffett method of selecting companies which are below market value and thus have a margin of safety.
POSITIVES: Gas is the only fossil fuel which grows it’s total energy demand until 2035.
(Thus looking for companies with large exposure to gas production is useful)
Oil Prices & Production costs:
All the Large & small Oil producers are investing lots into OIL production. (Graphs of oil company investments)
These number of investments in production will create lots of supply, in addition to all the new technologies which could potentially disrupt the industry.
Thus due to only a 1-2% increase in global demand. It is essential that you PURCHASE OIL STOCKS at BELOW MARKET VALUE when SENTIMENT IS BAD to ensure great returns.
Exxon Mobile is still very profitable of at $40 a barrel. So that is why investment continues in oil production.
At just $25 a barrel many oil production projects will still break even.
It’s clear that the larger oil companies are preparing for lower oil barrel prices.
————————————————————————————————————————————-
The Latest Market Crash & Global Drop in Demand.
Due to the latest market crash and Lockdown of all transport there was of course a global drop in demand.
So OPEC (Oil Producing & exporting countries) met up in Vienna to discuss how they should stabilize oil prices by reducing the production and not going into a price war!
The idea was to get all countries to agree on a price floor.
So each country can decrease production by 5% but the price may shoot up by 15%. Thus the country actually ends up being more profitable.
Demand is currently at: 100 million barrels per day
Supply is currently 1-3 million barrels greater.
However, RUSSIA said they are not agreeing to the price floor initially.
And Saudi Arabia wished to increase it’s production to 10 million barrels per day.
SAUDI ARABIA HAS VERY LOW PRODUCTION COSTS THUS IS STILL PROFITABLE EVEN WHEN OIL PRICES ARE LOW.
ROACE is 41% (2018)
Return on average capital employed.
Saudi Aramco margins are 30% of net income while shell is happy to get 5%.
THE GOOD NEWS IS SAUDI ARABIA and RUSSIA have finally agreed to cut Oil production costs.
This caused the price of CRUDE oil to decrease initially by over 20% then by over 50%
Currently at just $22 a barrel! Previous high of $60 a barrel.
OPEC is trying to keep the price floor at around $40 a barrel.
This price swing has been further enhanced by USA oil & gas production going from 8 million barrels to 15 million barrels per day.
1 Barrel of oil is 42 barrels.
5.32 (Graph of US Oil production.
In 2010 – The US Industry learned how to start drilling horizontal oil wells & implement fracking.
This allowed the USA to double production in the past 10 years!
When Oil prices hit $80 a barrel a few years back every US company started increasing oil production.
Many US companies were taking on a lot of debt to increase production.
WHAT DOES THAT MEAN For Investors?
Invest in oil stocks with LOW DEBT
You should also stay away from companies with a large amount of debt as they may not be able to recover those loses with the oil price so low.
Many people got burned by investing into small startup oil companies which were massively Overleveraged. As they took on this debt with the same drilling margins and oil prices at $80 a barrel but then as oil prices plummeted they got stung.
Many will be actually losing money with oil prices at this level.
Look for LARGE GREAT companies with sound fundamentals, steady cashflow, Capital Discipline and invest the highest margin barrels.
Companies such as Shell, BP and Exon are some of my favorites. They will also be able to acquire these small oil production companies at a low cost.
BP, Shell and Exxon will also be selling off bad assets to reinvest that money into more efficient oil operations.
As an investor you need to look for opportunities to invest when short term market sentiment is bad and thus you can invest with a large margin of safety and get great returns.
I proved this concept during the LATEST market crash.
investing in the large Oil giants such as Royal Dutch Shell and BP at rock bottom prices and saw a 70% ROI in just 7 days and made £1000 profit of a very small investment. (SCREEN CAPTURES BP and SHELL)
