Virgin Money UK (VMUK.L), mcap=£2.2bn, price £1.53 vs £1.34

– UK bank at 43% TBV and 4x earnings despite double-digit ROE outlook, excess capital, and aggressive share repurchases.
– Investors are overly pessimistic about macro concerns and ignore the specifics of the company.
– Previously Clydedal Bank acquired Virgin Money in 2018.
– Management with an already proven track record of exceeding targets and over-delivering on cost savings.
– Timely opportunity as expenses are set to decline in the coming two years from the higher levels of initial investments into new digital strategy.
– The newly announced repurchase program might be the inflection point in capital return, with the potential for further buybacks.

– Currently trades at 43% of TBV and 4x earnings.
– At 1x BV and 9x EPS would be worth £4.1/share including dividends by the end of 2023.

Exp. gain: +200% to £4.1/share in 1.5 years.

Full $VMUK.L write-up (free guest account required):

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