Tuesday, November 15, 2011

Diary: Buffett, STB

Warren Buffett on the Best Buys

Notes from a video. the best buys have been when the numbers almost tell you not to - so you get a good company and not just a cigar butt. i owned a windmill at one time. and windmills are cigar butts, believe me. bought at one-third of working capital. he made money out of it, but there's no repetitive money to be made out of it. he understands qualitative the minute he gets the phone call. if you don't know enough about the business instantly, you wont know enough about it in a month or two months. you have to have a background, and know what you do and what you don't understand. if your circle of competence only has 30 companies in it out of thousands, and as long as you know which 30, then you're OK.

STB - Secure Trust Bank

This is another company for which I'm unsure as to how it landed on my "things to look at" pile. It's interesting that Sharelock Holmes hasn't any records for it.

STB is a regulated bank that provides banking services to customers in UK who may not be "adequately served by banks". Sounds iffy for starters. It has five segments: personal unsecured lending, motor finance (cars on HP), retail finance (unsecured finance for in-store and online retailers), and "One Bill", which helps customers with their household budgeting and payment processes (that almost seems deliberately vague). Perhaps it's a little ironic that the company is called "Secure" when it specialises in unsecured loans.

Seems to have been floated on 03-Nov-2011. According to Google it has a market cap of £109m and a PER of 21.23. There are 14.17m share in issue. According to Digital Look, there are no director shareholdings - which might be an inaccurate statement.

Obtaining financial statements seems an elusive endeavour, although I did bind a PDF of their Admissions Document. I see on page 51 that they have total shareholder equity of £16.5m. given a market cap of £109m, that would put the PBV at 6.6. Given that I can buy the UK's best banks (isn't that an oxymoron?) for less than book, this makes STB an easy avoid.

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