BCV action

[thewoodies]

Hello Hello,

For the French-speaking among you with a good home bias, what do you think of the BCV stock. It went from a high of around 100 CHF at the beginning of the year to 71-72 CHF currently. What explains this fall of ~26% YTD? A wealth manager contacted today advises this purchase to his clients…

With a dividend of 3.9 we are at a yield of 5.4% with a current purchase price.

Good investment or is there a twist? I'm waiting for their investor respondent's response for more info...

Good evening,

[Jerome]

Hello French-speaking,

I noticed that four institutional investors, including Vontobel, sold 350,000 shares in the first half of the year. One institutional investor even sold his entire position (Fundlogic).

I would stay on standby. Sure, the yield is good, but the momentum is not very good. The price is likely to continue to fall for some time. It is never good to try to compete with the crazy people who always have inside information on us, the retail investors.

I don't see anything formally worrying in terms of fundamentals based on the previous financial year. The debt is certainly a little high for a financial company, but the bank is generating a fair amount of liquidity to deal with it.

So we'll have to watch what happens in the coming months. Either the departure of institutional investors means nothing and the stock can be bought at a good price and with a good yield. Or something really is happening, and we're dealing with a Yield Trap, which unfortunately sometimes happens, particularly with banking stocks.

if our banking expert dividinde is around, gladly for his opinion

[thewoodies]

Wow, thanks for your insightful review… very insightful!

Being new to the canton of Vaud, my position today will at least have had the merit of increasing my sense of regional belonging, failing which it will increase the added value of my portfolio.

Still, the volume is significantly higher today (>50,000) than in recent weeks, if that means anything.

Have a nice evening,

[Jerome]

My pleasure.

The volume is reasonable compared to the past.

Nothing that shocks me.

[thewoodies]

Received a response from a BCV investor advisor. Very friendly and detailed response, although they generally avoid commenting on their share price.

Not to mention it as is, here are the broad outlines of the elements mentioned:

• Actions rather sought after for their defensive character during the crisis, less currently in the restart period.
• Entry into the EuroSTOXX 600 and MSCI World funds -> purchases by index funds then exit from the EuroSTOXX on June 18. Review of the MSCI World planned for next November.
• Strong fundamentals: “a clear and prioritized business strategy, a moderate risk profile, excellent financial strength and a simple distribution policy that meets the expectations of all shareholders.”
• The results published this summer were well received and should be consistent for the second half, barring any significant deterioration in the financial markets.

Have a nice day 🙂

 

 

[Jerome]

Thanks for sharing. I am always wary of bankers' opinions, for the simple reason that they have obvious conflicts of interest, depending on the investments they are involved in. So, when it comes to an opinion about their own bank, I am even more wary!

That being said, I find the elements you cite surprisingly quite neutral. They explain at least part of the negative pressure on the share price. I still think, however, that the momentum is not optimal and that it is better to let this negative spiral settle down before considering entering it.

[Author]

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