Are Barclays shares a buy now?

first_imgAre Barclays shares a buy now? Royston Roche | Monday, 11th January, 2021 | More on: BARC I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Royston Roche has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Click here to get access to our presentation, and learn how to get the name of this ‘double agent’! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Don’t miss our special stock presentation.It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.That’s why they’re referring to it as the FTSE’s ‘double agent’.Because they believe it’s working both with the market… And against it.To find out why we think you should add it to your portfolio today…center_img Our 6 ‘Best Buys Now’ Shares Image source: Getty Images. Enter Your Email Address 2020 has not been a good year for the stock market. It has been even worse for a large bank like Barclays (LSE: BARC), as its shares fell 14% in the past year. The returns are worse than the FTSE 100 index, which has dropped 11% in the same period.It has been indeed been a roller-coaster ride since the start of the pandemic in March. There is also positive news that the investors who have bought the stock at the beginning of September have a return of approximately 40%.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Macro environmentThe new variant of the coronavirus has come as a shock to retailers as the government was forced to announce a national lockdown on January 4, 2021. Investors will be keenly watching as to when the government will relax the lockdown. Moderna became the third Covid-19 vaccine to be approved in the UK as the new cases rise rapidly.Brexit will likely be another blow to the economy in the near term, and we are uncertain of the confusion that might prevail in the initial months.The Bank of England in its December meeting unanimously decided to keep the interest rates on hold at 0.1% against a backdrop of rising coronavirus infections and Brexit disruption.FundamentalsBarclays is diversified with the Wholesale division (57% of Q3 2020 YTD income) and net interest income (37% of Q3 2020 YTD income). This is positive for the bank since it relies less on interest income during this low-interest period.Year to date, total income increased by 3% year on year to £16.8bn. This was primarily helped by a 24% increase in Corporate and Investment Bank (CIB) income. The bank has been slowly increasing the market share in FICC and equities since 2017. Barclays’ International income grew by 11% y-o-y to £12.4bn and its UK income fell 12% y-o-y to £4.7bn. The bank’s profits fell 27% y-o-y to £1.3bn.The bank is well capitalised with a CET1 ratio of 14.6% when compared to 13.8% at the end of December 2019.While management expects certain headwinds to income in Barclays UK to persist in 2021, I believe the CIB franchise is well positioned for the future after a strong performance this year.The bank has already started cost-cutting measures as it looks to reduce its real estate expenses in the U.K., U.S. and India as more operations are moving to remote working.Barclays shares might restart dishing out dividends this year as the Prudential Regulatory Authority  has given the green signal for the banks to make dividend payment which was stopped to increase the capital level and protect the banks from potential loan losses during the pandemic.The macro environment is challenging, and the uncertainty makes me want to avoid Barclays shares at the moment. The bank is currently trading at a P/B ratio of 0.41 when compared to the historical five-year average of 0.46. In my opinion, the discount is not very large taking into consideration the macro risks and the expected growth. Simply click below to discover how you can take advantage of this. See all posts by Royston Rochelast_img read more

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