Metro Bank Plc – Terminal decline or Deep Value opportunity ? | Value Investing News

Metro Bank Plc – Terminal decline or Deep Value opportunity ?

  • Fundamentally, I do think that at the current share prIce the stock is already very “richly” valued as I don’t see a sustainable business model to earn the required returns on equity in the long run.I see a large risk that Metro Bank is rather a “one-trick pony” which worked well once but most likely not a second time.
  • Their case is quite simple: At the current valuation of ~360 mn GBP and shareholder equity of around 1,7 bn, they assume that even a direct run-off of the business would lead to a 100% gain return on investment which I find is entirely plausible.
  • If the stock drops below 1,50 GBP, I will be selling.
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