A Re-Look at Union Bank.
Union Bank is not tied to any major Index. Therefore, it is prone to extreme investor-pessimism.
It is currently trading at 97, it is way below the normal expected price of 167. Such, is the world of investment. Time and again we get stocks for cheap.
But, is it alright to buy at CMP?
Well, Union Bank has made Fresh Low of the current down-leg today, touching the lows of 2008! That is bearish beyond doubt. It means, although Bank Nifty (SBI and Axis) may go up Union is set to go further down... and it won't harm the nation/FM's reputation in anyway since it is not an Index stock.
On the other hand, the price is very good. Whenever, this sector gets back into favour, a year or two later, it is going to massively rally beacuse of one single reason that it is popular for giving dividends consistently and it is fundamentally decent.
Union Bank is not tied to any major Index. Therefore, it is prone to extreme investor-pessimism.
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Union
Shares O/s 596.79
Year NP EPS Price PE
2004 712 11.93 76 6.37
2005 719 12.05 113 9.38
2006 675 11.31 122 10.79
2007 845 14.16 104 7.35
2008 1387 23.24 141 6.07
2009 1727 28.94 147 5.08
2010 2075 34.77 293 8.43
2011 2082 34.89 348 9.98
2012 1787 29.94 235 7.85
2013 2158 36.16 218 6.03
2014E 32.94 167 5.08
Potential 32.94 [B]329 [/B]9.98
But, is it alright to buy at CMP?
Well, Union Bank has made Fresh Low of the current down-leg today, touching the lows of 2008! That is bearish beyond doubt. It means, although Bank Nifty (SBI and Axis) may go up Union is set to go further down... and it won't harm the nation/FM's reputation in anyway since it is not an Index stock.
On the other hand, the price is very good. Whenever, this sector gets back into favour, a year or two later, it is going to massively rally beacuse of one single reason that it is popular for giving dividends consistently and it is fundamentally decent.