Barclays share price: is it finally the right time to buy?

first_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Roland Head | Saturday, 24th October, 2020 | More on: BARC Image source: Getty Images Enter Your Email Address Roland Head 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. Simply click below to discover how you can take advantage of this. See all posts by Roland Headcenter_img 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. Famed investor Jim Slater once said that when buying a turnaround stock, “it is absolutely essential” that forecasts for the year ahead show rising profits. Investors tempted by the Barclays (LSE: BARC) share price can tick that box — profits are expected to bounce back next year.However, anyone who has followed the big bank stocks for a while will be aware of the risk that this could be yet another false dawn. Will it be different this time? I think it could be.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…Better than expectedOne reason for my optimism is that Barclays’ third-quarter results on Friday were better than expected. New charges for bad debt fell to £608m, compared to £1,623m during the second quarter. Although these numbers are still far higher than at the same point last year, this fall is encouraging as it suggests the economy could be stabilising.Another piece of good news from Friday’s figures came from Barclays’ investment banking division. Critics of CEO Jes Staley have said that he should wind down this operation. Mr Staley — a former investment banker — has resisted this pressure. This year’s results suggest he might be taking the right path.Profits from Barclays’ corporate and investment banking operations have risen by 24% to £9.4bn during the first nine months of 2020. That’s helped to offset a 21% reduction in profits from credit cards business and a 12% drop in profits from UK high street banking.Mr Staley’s strategy of diversification appears to be paying off. Weaker profits in some areas have been offset by gains elsewhere. That’s a good result, in my view, although I’m not sure if this strength will continue into 2021.Bargain buy or value trap?Barclays’ share price rose by 7% on Friday as the market digested these results. Despite this, the stock still looks very cheap on most measures.For example, at 112p, the shares trade at a 60% discount to the bank’s tangible net asset value of 275p per share.Using profits as a guide, Barclays stock is priced at just eight times 2021 forecast earnings.The shares could also offer a decent dividend yield — consensus forecasts suggest a payout of 4.6p in 2021, which would give the stock a yield of 4.1%.All these numbers look attractive to me. I can also see some other positive signs. Barclays costs fell to 60% of the bank’s income during the first nine months of this year. That compares to a figure of 72% during the same period last year.On the face of it, I think Barclays’ shares offer good value at current levels. I only have one concern.Barclays shares: I might buyThe big concern with all the major UK banks is that they’re just not very profitable. Barclays’ return on tangible equity was just 3.6% during the first nine months of 2020. That compares to a figure of 5.1% last year, which isn’t very exciting either.Banks that generate low returns tend to trade on modest valuations. With interest rates low and the UK economy likely to face a recession, I’m not sure how quickly things will improve.Despite this, I do think Barclays shares are cheap enough to buy. Over time, I’d expect positive returns from this level. However, I think there are probably more exciting choices elsewhere. “This Stock Could Be Like Buying Amazon in 1997” 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. Barclays share price: is it finally the right time to buy? Our 6 ‘Best Buys Now’ Shareslast_img

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