Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Crispin Odey: why Barclays makes me 'very excited'

Crispin Odey: why Barclays makes me 'very excited'

Crispin Odey, the manager of the Insynergy Odey fund, reveals the banks, companies and regions he thinks are showing attractive valuations, as equity markets fall and shares slump to levels last seen in 2009.

One of these stocks is UK lender Barclays, which has been hit hard in the downturn as concern over banks' exposure to the European sovereign debt crisis grow.

'It [Barclays] has taken great strides over the last two years to improve mortgage margins and build their capital base, but are being rewarded with a price/earnings ratio of only five to six times and a price/book ratio of 0.4 times, a rating which suggests that other investors believe the bank’s assets are only worth roughly half of the balance sheet valuation.'

The Citywire Selection manager said although markets have fallen sharply, the question is whether this is justified by the economic outlook, or whether this represents a buying opportunity.

Odey said: ‘Remember that the only time that shares are a bargain is when there are more sellers than buyers and in such times, there is always something to worry about.’

He added it is hard to believe that a significant portion of any bad news surrounding Greece, Spain and French banks are not discounted into share prices, as these issues, along with the European sovereign debt crisis among other factors, have been debated for so long.

He said: ‘Another theme that is currently heavy in the portfolio is Germany. This country has benefited from a much weaker currency than would otherwise have been the case had the Deutschmark still been an independent currency.’

As a result, he said car manufacturers such as BMW and Volkswagen have enjoyed this weaker currency and yet are priced at just only six times and five and a half times price/earnings ratios despite prodigious cash generation.

The largest position in Odey’s fund remains in British Sky Broadcasting. Although News Corp to withdrew their bid for BskyB’s earlier in the year, hurting the share price, Odey believes this is positive in the long-term for BskyB, as he felt the merger would have undervalued the firm and its cash generation down the line.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Boutique tapes: my business will never be sold

Boutique tapes: my business will never be sold

In the final part of our four part series we discuss consolidation and whether it's getting tougher for boutiques to survive.

Play Boutique tapes: are top managers better off at small firms?

Boutique tapes: are top managers better off at small firms?

In episode three of our series, boutique bosses discuss whether the best fund managers are more likely to thrive at smaller firms.

Play Boutique tapes: if you want a Ferrari, you have to pay for it

Boutique tapes: if you want a Ferrari, you have to pay for it

In the second part of our four-part series, boutique bosses are asked how they can justify the fees charged by active managers.

Read More
Your Business: Cover Star Club

Profile: how this boutique beat the big guns of wealth

Profile: how this boutique beat the big guns of wealth

This small west country offshoot of a local IFA scooped a 2018 Citywire award from beneath the noses of the national challengers

Wealth Manager on Twitter