Wednesday, September 27, 2006

Adding to my individual equities...buying LloydsTSB


Bought ~£43,000 of LloydsTSB, the UK retail bank. Paid equivalent of
540p per share, in £80 per share.

Why? Well mainly, 1) they pay a dividend yield of 7%, 2) I think they
could spin off their Scottish Widows insurance subsiduary, and focus on
banking, and 3) they are a properly sh*t run business that a buyer could
come in and turnaround...given increasing banking sector consolidation
in Europe, it seems credible to believe that large US or European guys
could pay up to get a UK footprint (current market cap ~$57bn).

This is a proper bellweather UK stock (lots of normal folk still own
shares from privatisation of TSB 20 years ago), and as they UK market
rises, this is one of the shares that will get bought by those retail
investors looking for equity exposure...the only way is up. Target 600p
for starters.

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