Bank of Queensland has been under selling pressure for two months now.
The pressure has come from a number of factors, the sell down by Linfox of their stake in the company, expectations of bad and doubtful debts (BDD) and the expected first half results. We have seen the price of this stock fall from $16 last September down to lows of $7 this month.
Investors seem to be ignoring the news flow from the company over the past weeks.
First, Linfox has announced that they have completed their sell down, this will take selling pressure off the stock, next, the bad and doubtful debts were over estimated by the market, in their half year results BDDs are running at 0.06 of gross loans as compared to the initial estimate 0.08, as such BDD are well contained. They also announced that cash profit was up 25% year on year. Overall a result which surprised the market.
Here is a stock which looks oversold, it is paying a 10% dividend and has target price 17% above the current level.
If you are comfortable to venture out of the big four banks I expect that you would do well to put some funds in Bank of Queensland.
PS. If you would like more detail on Bank of Queensland please give us a call... 07 4771 4577