How to Value Bank Stocks - Simple Financial Stock Valuation Methods
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- เผยแพร่เมื่อ 29 ต.ค. 2020
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In this video, we look at some of the best ways to value financial stocks. we look at Bank of America, JP Morgan Chase, and Allstate as 3 examples of what methods work the best to value banks and insurance companies.
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Jimmy is one of the free channels who teaches fundamentals instead of selling hype and entertainment. I appreciate that.
Check out Aswath Damodaran
@@aminaganovic7582 He's a good one as well, no doubt. But his videos are so very long without passing any new information imo. But i like him as well
Agreed
Jimmy, Sven and that Australian guy (forgot his name).
Aside from that, there’s a few Tesla fanboy channels as well (which aren’t good for any other stocks).
Jimmy always mentions how much he appreciates us. Lets take some time to appreciate how much we appreciate Jimmy. Thank you kind sir for making these videos.
Best educational channel ever and I have seen dozens of them...
Straight to the point and kept it simple to understand. Always come back here to refresh my valuation basics.
The best financial channel there is.
The best financial youtuber hands down.
Thank you Jimmy for teaching this. You are the hero of this crisis! :)
man, you're just the best! Thank you from Brazil
Jimmy doesn’t wear a Polo! This Episode must stand out from the others!
Lol true!
Always look forward to your content!
I have been self studying investing, I’ve listened to or read about 4 books in the past three months as well as watching a tonne of videos. I feel like this channel has helped the most out of anything. Including past Berkshire AGMs. Content like this is great, I remember buffet saying that an investor should be able to identify a company’s industry by its statistics, but never knew what to look for. This has helped a lot. Thanks Jimmy
Good content as always. But buying BoA at a P/B Ratio of 0.11 in late 2008 was not that easy as it might seem in the retrospective. At that time nobody could be sure, if the assets are really worth their value on paper. If you cannot be sure if the issuer of a bond or stock might go out of business tomorrow...
Love ❤️ you Jimmy !! Your the best financial educator on this platform by far !! Keep killing the like button for Jimmy 👍🏼👏❤️🙌🏼🇺🇸👌☑️
Jimmy is the man with the plan!
Very informative, my hat off to you.
Hi Jimmy :) Tks for all the free knowledge. But looks like money market fund liquidity buffers are getting increased in GS before election. Still good time to buy?
Really love how easy you make to understand us these very useful rule of thumb based on the P/TBV ratio. So, Is it a good proxy to TBV substracting from the value of equity the value of intangible assets? Thanks in advance if you can confirm or correct my interpretation and I just want to say that I really appreciate your valuable financial lessons!
Great video, Jimmy. Would it be possible for you can make a similar video to share about evaluating other categories such as energy stocks? There seem to be some good investment opportunities in that vertical.
Great content as always, would this also work well with REITS? If you could do a video on reits, that'd be super great too! Thanks Jimmy :")
You should compare the performance of Jpm from 2011 to 2020 against the performance of s&p500 imo, great video Jimmy!
Really good video as usual. On this subject, I would like to know your thoughts on Prudential Financial, as it seems very interesting to me right now.
What a hidden gem. Love it!
Well explained for the question I had in a short period of time.
Great video Jimmy.
i wish i can like this video twice. thanks jimmy
Jimmy where can I get those charts you used to compare the stock price with p/tbv ratio?
This is gold! Thank you!
Thank you, appreciate it a lot
Great video. Very helpful. Thank you!
Super great video and value. Thanks Victor
Very good video I admire your vocation to teach. Greetings from Argentina
The book value of WFC is $38.95 but the stock price is $21.08. What do you think about that?
One of the best videos I've seen and something I've been searching for. I do wonder why it holds true only for Financial stocks?. Why not to all stocks?. And did the link you post at the end goes for all other stock types?. Thank you again.
Good job buddy!
thaaaanks Jimmy !!!
Love your analysis bro. From india
Good job! How do you plot p/b and p/tbv?
Thank you!
Thanks for the video learning a ton
I just found "Gold"! Thank you so much for sharing and this great explanation! I'll stick to these rules and watch in the long run if they pay out. By the way, is there any valuation method to determine when to exit? ;-)
Btw, for your intel stock analysis, what Growth rate and RP did you use for intel? I just wanted to know because the fair price seems to be rather high at around 88
nice, one more thought, what about deposit to market cap?
Thanks for sharing how to value financial stock. Asset management stock seems different. What is your advice on how to value asset management stocks? Thanks for your advice.
Great Job Jimmy, 👍 terima kasih
Thanks, this video is A+
Could you do an analysis on the tsla financials?
This and everything money helped me so much, thanks for making me rich👍🏽 and helping me find a passion
How do u find the tangible book value of a company?
Looking at this it looks as though all UK banks seem very undervalued at the moment!
I’d love to hear what you look for in businesses to see if you like how they run, operate, make money, talk about there problems and risks etc as in the annual reports
This is great.
this is very good!
Soooo Jimmy you are saying load up on Wells Fargo ???
Can anyone tell me how to graphically show P/TBV or P/BV against actual stock price?
nice video jimmy, do you know how can we find P/TBV in webpages? thanks in advance!!
Hi everyone,
how reliable is the book value of companies during those economic downturns? I would assume that also many assets loose value such as properties, cars, investments, etc.). I know that they would have to adjust their balance sheet accordingly but I cannot imagine how reliable this will be in times of market stress. If I take 2008 for example, I imagine it as really difficult to trust in JPM that their balance sheets are correctly and that their assets keep their value somehow.
Great video! But one thing that you're missing here in my view is to correct for survivorship bias.. eg. why didnt you invest in Lehman Brothers in 2008? At some point they probably had a great P/B ratio ;) .. before they got bust and you lost all your money..
So in my view all these ratios can just help to form a broader view.. managememt, liquidity, capital adequacy all equally important
EU banks are really cheap to bookvalue 0.2-0.3 for example , can you do a video on these? dutch and uk banks for example
Great video. Could you analyze Nordstrom?
Thank you
Jimmy please make video on Tech stock ratios valuation
Are the returns of Jimmy's portfolio published anywhere?
Hi Jimmy, could you explain why those methods don't work for European banks? Or are they just undervalued all this time?
Where can I find the TBV of banks?
Thanks
Look the market reset was on March, since then on is a new cycle, invest now before election and before the stimulus package.
Been thinking about joining a platform like this, its been 3years since I retired all I can do now is invest as much as I can. Not looking for something long term at least about a year till I start ripping profits from it.
There are quite a number of stocks that can help grow your portfolio as fast as that. All the same glad to see there are traders benefitting from all the craziness the market has thrown out this year.
Just looked up your traders name and I am really impressed by her work and dedication towards it. The articles I read about her were inspiring as well.
I have been able to secure a steady source of passive income for my self and family over the past one year trading precious metals and forex through my broker Elizabeth Warren Shaw. Would encourage getting in touch with her am sure you'd find her platform helpful
This Sounds interesting wouldn't be a bad idea to work alongside a professional for a change.
Great video
Your the goat jimmy.
Great video; however, you could have used Lehman Brothers in your analysis here and that wouldn’t have worked so well
Great content, however I think it might be missing an important thing. If the fundamentals of the company are worsening long-term you should abstain from investing even if the stock trades at a margin of safety to it's historical Price-to-TangileValue average. If the profitability/earnings/book value has been falling in the past, probably you can expect it will continue to happen going forward (unless you have deep knowledge that the trend might change). I know most US big banks have been improving but I am from Europe and the banks here are decreasingly profitable.
This is a fantastic point, if the company is garbage, we can probably expect garbage returns. Well said!
Not a great prediction that last one, european banks are now reporting higher profitability numbers and financials are one the best segments of the market. I bought Santander around the time this video was released and I’m doing fantastic.
Can you skip adding depreciation, in the formula?
How do you calculate the TBV of a bank
What is proforma NPA?
my man jimmy just cracked the code on how to value bank stocks... i'm speechless
How to calculate tangible book value?
Which ratio tell real value of Technology Stock please make video immediately
can you do a video how to value tech companies?
Where to get data of book value???
Jimmy, what you think about the JL Collins investing method?
A couple of questions:
Are P/BV or P/TBV leading or lagging indicators?
How does these indicators stack up and provide insights into disruptive financial stocks like Square whose strategy involve the elimination of tangible assets like brick-and-mortar banking to increase margins?
Square is not a bonafide bank. It is a software company that facilitates banking... essentially a middleman/broker. They have an affiliation/s with an actual bank/s. You value the actual bank as described here, if you are valuing their stock... and evaluate Square as you would any other tech company.
For example... the company that builds ATM machines... they are not the bank, but merely provide hardware/software to facilitate the banking process. Same with Square.
And the reason we value banks and financial institutions differently is because the free cash is the actual inventory/product that is being sold, not just distributed to investors, making them look prettier than they might actually be if valued in the standard way.
@@mbrasseau Thanks for the info and insights. I don't hold any Square, and typically stick to my own lane which is natural resources, esp, gold, energy, mining, and O&G. But curiosity does look.
I think one needs to be careful about what is on the book, as some banks may have risky assets that can lose all value in case of a crisis (CDOs in 2008). And I find banks to be not very transparent about what they have in their balance sheet and about the level of risk taken. Maybe you had the opportunity to do a deep dive on BAC’s balance sheet and could share that in a video?
Thanks for the video!!! Please put TYSON and ANHEUSER-BUSCH Inbev on the list of individual stocks!
where do you get this graphs though ? tradingview ?
Investorsgrow.com
Where can we find the P/TBV?
Has anyboby find it?
How does one know at which price 1.0x is?
If the stock price is equal to TBV per share then that is 1.0x
Nice shirt sir.
Whats the website where you can check which employees or directors are buying/selling shares in their own company?
JIMMY!!!
Could you make a Video on how to analyse/find the instrinsic Value of mREITs and BDCs?
Hey Jimmy love your work
Can you do PayPal??
Does anyone have a group chat or discord that's watching the market ?
If you invest in bank stocks dividends make $1,200.00 in each 12 different Bank stocks dividends that sounds good deal
I loaded up on BAC this week :)
I literally just googled "valuing banks" yesterday. You're Godsent, Jimmy!
I tend to enjoy much of your work, though I found this entry to be weak. It may be of value (no pun intended) to discuss further in depth the considerations to make when performing valuation of financial-services companies (e.g., risks unique to the sector).
I own quite a few financial stocks right now as they're so well below book value and book value is so easy to understand! Nice job as always, thank you!
I was thinking about banks stocks...What do think about walsfargo? Looks cheap!! In the long run (3+yrs) I can easily see double or triple the investment
I agree, started a position in wells Fargo at 24 usd and have been averaging down ever since
@@jesperklingstrom9133 Wells Fargo's current price is $21.14. Its book value per share for the quarter that ended in Jun. 2020 was $38.42. Hence, today's PB Ratio of Wells Fargo is 0.55
I googled this...looks attractive
@@mh01769 actually their Tangible Book Value per share is more like $30.46. still a very good discount though
Low PTBV gives a hint of the valuation, it's only a starting point to looking into its fundamentals. It may or may not turn out to be a good buy. Some company with attractive PTBV has serious long-term problems, such as losing its moat.
Thank you for this lesson on evaluating the value of stocks. I needed this!
PTBV
I was waiting for some crazy formulas with some kind of extended discounted FCF. But ur just saying with should buy when P/B is less that 1😂😂
This is great! Thank you jimmy, really appreciate the value of your videos! One quick question tho, who do draw these graphs in your video? You always make them look so nice! Is this excel or some other app that you use?