Further to the previous thread there is support to hold a poll to see if the Club should purchase HSBC Holdings.
Banks have been struggling in the past few years as we are all aware. HSBC has seen a significant drop in value over the past year - over 1/3rd of its value. In the last month the bank hit a low point and recovered by ~9% in the few weeks that followed. Since then the bank has released quarterly results that significantly beat analysts forecasts.
Despite this the share lost ground as the bottom line showed a reduction in profits from last year, which has probably had an impact on the price.HSBC's first-quarter profits fell 14% compared to last year but was better than analyst forecasts, with chief executive Stuart Gulliver expressed confidence that cost-reduction plans now under way will hit their target by the end of next year.
Amid a tough few months for the industry, the banking giant saw its profits before tax dwindle 14% to $6.12bn at the reported level, or 18% to $5.43bn on an adjusted basis.
The dividend for HSBC is currently very good at around 7%, though it may be cut at some point. Management have been reported to be against a dividend cut. Current share price is currently just over 5% above the lowest it has been since 2008. I think we have a strong opportunity here for a long-term investment, similar to RDSB.
If we were to invest in this share I would advise we:
- invest ~£600 of our kitty in the share
- did so on a dividend income basis and review should the dividend be cut
- consider selling the share should we see 20% gain on value, or at least lock in a significant gain and track the peak more closely