Can Barclays Find Support?

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With shares of Barclays (NYSE:BCS) trading around $15, is BCS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Barclays is a global financial services provider engaged in retail banking, credit cards, wholesale banking, investment banking, wealth management, and investment management services. The company operates in eight segments: UK Retail and Business Banking, Europe Retail and Business Banking, Africa Retail and Business Banking, Barclaycard, Barclays Investment Bank, Barclays Corporate Banking, Wealth and Investment Management, and Head Office and Other Operations. Banking and capital markets services are just about a requirement for most consumers and companies around the world.

Barclays — like many other large banks — still bears the scars of the financial crisis, with hefty regulatory charges and long-lasting litigation still impacting its operations Chief Executive Officer Antony Jenkins, who has pushed to implement a “fundamentally different culture” than that created by his predecessor Bob Diamond. It has also downsized the size, structure, and workforce of the second largest bank by assets in the United Kingdom in an effort to rid its balance sheet of capital-hungry loan portfolios and limit derivatives, and securities lending so as to be compliant with the global banking rules known as Basel III. The results of the British bank’s fourth-quarter earnings showed the size of the task facing Jenkins. But the goal is still to downsize, and through sources familiar with the matter, Reuters learned that Barclays is reviewing the size and shape of its investment bank so that the bank can better focus on its most profitable areas.

A Barclays spokesperson told the publication that management has no plans to change leadership at the investment bank. But the fact remains that shareholders — who have bid shares of the British bank down 13.57 percent down this year through Thursday — were outraged after Barclays announced last month that it had increased bonus payments by 10 percent to 2.4 billion pounds last year, despite the large decrease in its pre-tax profits.

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