BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
SELL - rate is expected to go down, i.e. the first currency is expected to lose value against the second currency.
Based in London, Barclays is the definition of a banking giant. The services offered by Barclays are diverse and they cover an impressive geographical area, from the UK and US, to Europe, the Middle East, Africa and South America.
Retail banking is just one of the verticals in which Barclays is a major international actor. It is also involved in investment banking, services and wealth management.
An interesting thing about Barclays is the selection of shareholders it possesses. It has apparently been considered an attractive investment by scores of institutional investors. Some of these investors offer the same services as Barclays and are therefore its competitors.
One such stock holder is Blackrock Inc. Blackrock is another financial giant: it manages investments for other major players, such as pension funds, mutual funds, banks, corporations, publicly owned companies, etc.
Blackrock owns well in excess of 10 million Barclays shares, totaling more than $290 million in value.
Other major Barclay’s shareholders are: Investco, Cohen and Steers, Bank of America and Morgan Stanley.
As a wealth manager, Barclays has attracted other investment-focused operations. This interconnection lays bare the vulnerability of the financial system to domino-like contagion, when something goes wrong at one of these investment giants.
Given how so many top wealth management institutions have found Barclays stock attractive, it must be a viable investment vehicle.
That said, the performance of Barclays stock over the last 5 years has been anything but impressive. During that time, is has shed about 46% of its value. Even over the last year, it has lost some 26%. Right now, despite what the above mentioned institutions and long-time retail holders think, Barclays stock is by no means a good investment option.
Despite the gloomy outlook, the business performance which is supposed to underlie share price has turned around over the said 5 years. Indeed, during that time, Barclays went from loss to profit. With investor trust and sentiment down the drain however, this feat failed to translate to share price.
The share price alone hardly gives an accurate picture of the return generated by Barclays stock. For that purpose, the Total Shareholder Return is much more relevant, because it takes dividends into account as well.
Even so, the picture is still not pretty. Over the said 5 years, the TSR turned in a performance of -39%.
At the end of the day, the obvious question regarding Barclays stock is: is it cheap? And as such, could it be a decent buy?
Several metrics should be considered before making that decision. The bottom line is however that the stock is not the best choice at this point in time.
Although Brexit is a ubiquitous culprit these days, blamed for just about everything, its role in Barclays share price-slide cannot really be denied. In an effort to revamp its operations before Brexit, the company recently announced plans to shift some of its derivatives and equity jobs to Paris.
Rough post-Brexit sailing is expected and that does not bode well for the future value of Barclay’s shares.
BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
SELL - rate is expected to go down, i.e. the first currency is expected to lose value against the second currency.