Avoiding the regional bank BOQ since late 2021 has paid dividends, including this year-to-date, where the stock is down over -20% compared to ANZ Bank (ANZ), which is still up +4.4% even after yesterday’s dip following its average result. We believe the “bad news” is already largely known for BOQ and built into the share price after last month’s result. For the brave and slightly contrarian investor, there is a potential switch at play after ANZ, NAB, and WBC trade ex-dividend this month aided by BOQ’s current significant 8.8% short position, some of which may get unwound into Christmas.
Supporting these thoughts is BOQ is currently trading very cheap v history, at just 0.6x Price to Book compared to a historical average of around 1x plus its P/E of 9.9x is ~10% below its historical average of 11.1x, i.e multiples like this are usually the case for a reason, headlined by an obvious lack of scale.
- We can see BOQ testing the $6.25 region into 2024, or ~15% higher, as they are forced to address their scale issues, although we are unlikely to buy it.
