AFF Member Stock Discussion

[cove]

We don’t follow QUAL sorry. Chart looks ok.

 

[cove]

I spent a couple of hours reading the Judo Capital 2024 annual report. I wish they would report quarterly.154 pages is a big read. Their earnings per share was just over 6 cents per share and was a little lower than in 2023.No dividend after 5 years.

 

[Brissy1]

I spent a couple of hours reading the Judo Capital 2024 annual report. I wish they would report quarterly.154 pages is a big read. Their earnings per share was just over 6 cents per share and was a little lower than in 2023.No dividend after 5 years.

Looked at Judo a year ago as an anti cyclical buy, but wasn't comfortable buying into a small business lender in an economic downturn. I remember even WBC almost went under in 1990s (had to raise capital @$3/ share).
Missed the boat now.
A big consideration is whether bad debt provisions are realistic. Just can't know.

 

[drron]

WBC was a lot worse in 1974. fell to less than $1. my father loaded up and did very well. Though there was a lot of commentary about them going under.

 

[cove]

Yes Judo Capital JDO made less in the second half of last financial year so that is why we haven’t bought too many.
I did buy Westpac at $2.80 and $3.00 in the 1990 crunch for them as they were our main business bank for over 40 years. Westpac is up more than 10 times from that episode with their near death experience.We still hold Westpac.
Judo is trying for a Net Interest Margin approaching 3.0 and their loans in arrears were 2.3% of total loans. Net profit after tax was about 69 million so it is tiny compared with the big 5 banks in Australia. If they get to $15 billion in loans with less loan losses their profit could more thadouble.
What I didn’t like was the top dogs salaries so I will be wanting to go to their AGM in 2025.
The top 20 shareholders hold over 80% of the shares on issue.

 

[Brissy1]

Yes Judo Capital JDO made less in the second half of last financial year so that is why we haven’t bought too many.
I did buy Westpac at $2.80 and $3.00 in the 1990 crunch for them as they were our main business bank for over 40 years. Westpac is up more than 10 times from that episode with their near death experience.We still hold Westpac.
Judo is trying for a Net Interest Margin approaching 3.0 and their loans in arrears were 2.3% of total loans. Net profit after tax was about 69 million so it is tiny compared with the big 5 banks in Australia. If they get to $15 billion in loans with less loan losses their profit could more thadouble.
What I didn’t like was the top dogs salaries so I will be wanting to go to their AGM in 2025.
The top 20 shareholders hold over 80% of the shares on issue.

That's interesting.
-Net Interest Margin about 1% higher than big 4, but quality of their loan book in order to get that higher margin??
-But, Loans in arrears about 1% higher (although not sure if that's comparing apples with apples),
-Lowering interest rates might reduce margins for all the banks, but for Judo might improve/lessen arrears... that's the cake.

Might do well, personally not buying as there is no way I can know the quality of their loans or validity of their provisions.

 

[Kerrodt]

That's interesting.
-Net Interest Margin about 1% higher than big 4, but quality of their loan book in order to get that higher margin??
-But, Loans in arrears about 1% higher (although not sure if that's comparing apples with apples),
-Lowering interest rates might reduce margins for all the banks, but for Judo might improve/lessen arrears... that's the cake.

Might do well, personally not buying as there is no way I can know the quality of their loans or validity of their provisions.

On your first two points I don’t think you’re comparing apples with apples.

Judo is a business bank only lender. No retail/consumer so no home loans. No corporate/big end of town lending.

Retail lending in the big 4 banks is predominantly home loans at much lower NIM and arrears% than a business banking division.

Corporate lending is also on pretty thin NIM compared to a business bank lending book.

Therefore, I’d expect Judo to have a higher NIM% when compared to the big 4 at a top line level.