Stockchase Opinions

Paul Harris, CFAAllied Irish Bank PLCAIBBUY ON WEAKNESSNov 03, 2009

Was highly involved in the real estate market and over invested and over loaned and had a tremendous problem when liquidity crisis occurred. Essentials of economy are strong and they had a net immigration into the country. It ran up after the low and had quite a good, then pulled back. Short term there will be volatility.
$4.65

Stock price when the opinion was issued

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RISKY
Insolvent for all intents and purposes. Might be used in an options strategy.
DON'T BUY
Irish bank that will probably end up being fully owned by the Irish Government in the next little while. Would prefer Bank of Ireland (IRE-N) as their lending book is much better and didn’t rush into international investing.
WEAK BUY
Will probably go up in the next 3 or 4 years. Banking sector was hit badly in Ireland. You will have to wait it out a long time if you buy it now. The government will back it up.
DON'T BUY
Irish economy is in a difficult situation and there are a lot of real estate issues. Government owns most of the shares. It will take a long time to work out.
WEAK BUY
Have a major job in repairing their capital ratios and balance sheet. Thinks there will be significant asset sales to accomplish this, which makes it difficult to evaluate. OK for risk capital and you are interested.
BUY
Suffered from the overheating of the property market in Ireland. Banks are very much a proxy for the economy of the country they are in. Ireland is a great economy with a young well educated work force with low tax rates. It will come back but may take a while. This may be a good opportunity.
BUY ON WEAKNESS
Similar to many of the English banks in that the government took them up as Ireland fell into a deep recession. Irish economy will probably come back because of low tax rates and educated workforce. Expect they will do an equity issue to increase their tier 1 capital.
DON'T BUY
Huge problems with its loan portfolios. Prefer Standard Chartered or HSBC.
HOLD
Has been in the downdraft of the Bank of Scotland and Icelandic Bank meltdown. Doesn't think it's a zero candidate, so not worth selling it at this point. Will perform as well as other financials. Will probably take 2 years to turn around. Profitability of the financial sector is going to be hurt. Thinks the yield will be cut in half at some point.
BUY
This is the National bank of Ireland that is a very high growth area. A well-run company that has done well. Ireland continues to have a lot of pressure from the housing market, which is very hot, so you have to keep on top of their liability.
DON'T BUY
A little cautious on European banks as most of them have been driven by the mortgage boom and this revenue is going to slow down. Well-managed bank.
DON'T BUY
A solid bank. Have gone through a number of issues such as rogue traders and top executive misdemeanors. Now recovering. Only trades at 10 X earnings. Prefers others.
DON'T BUY
Have to be careful with non-Canadian banks. Tends to trade with US banks and he is looking for some weakness getting through the earnings season. Prefers Canadian banks.