HBC Fundamental Research Investment Analysis, HSBC Holdings plc ADS

HSBC Holdings plc ADS (HBC)

The Razor's Edge

2-Year Price History

Recent Price
(4/15 4:03PM) +3.1%
$36.47
52-Week Price
$22.89 - $88.15
Market Capitalization
$84.9 Billion
Dividend Yield
5.70%
Most Recent Dividend
$4.60

About HSBC Holdings plc ADS

HSBC Holdings plc ADS is considered to operate in the Financial sector. They specifically operate in the Foreign Money Center Banks business segment contained within the Banking industry.

The Company provides financial services through four customer groups and global businesses: Personal Financial Services; Commercial Banking; Global Banking and Markets; and Private Banking.

A Word Of Caution

HSBC Holdings plc ADS (HBC) has experienced a very significant loss in market value recently. Clearly this drop in price will have an impact on the valuation but the recent events that caused the drop may have not been fully factored into our analysis yet. When a stock loses value very quickly it could be a sign that there is a fear of bankruptcy.

Please take a look at the RazorWire feed on the left had side of the page. If HSBC Holdings PLC has been mentioned on business television recently a portion of that story should be displayed. This should help bring you up to speed on any major issues they are facing right now.

Of course, you may proceed to review our research report for this security, but please be aware that our model may not reflect significant factors surrounding this company.

Therefore, (and as always), check additional sources and available information regarding HBC before making an investment decision.

Ockham's Rating

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HBC Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at HBC through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 2.39x and 1.71x respectively.

Utilizing this range we can see that HBC’s current Price to Sales per share ratio of 0.93x is significantly below its average levels historically. In fact, with a current price of $35.02, HBC is a full 55% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for HBC.

HBC Cash Earnings

Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. HBC is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for HBC, the current level of Cash Earnings compared to its historical levels helps identify where HBC is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 15.00 and a historical low Cash Earnings per share ratio of 10.91, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for HBC? From the Ockham perspective, we are looking specifically at HBC to see if the market is recognizing the huge disparity between HBC's past stock price to Cash Earnings ratio to today's levels. At a difference of 67% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at HBC. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

HBC Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for HBC to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for HBC is $2.00 producing a current dividend yield of 5.71%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from HBC against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from HBC over previous years was 10.32% while the lowest dividend yield was 2.27%. Management at HBC needs to get the current dividend yield above the historical median before we are comfortable from this point of view.

Peer Comparison

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HSBC Holdings plc ADS Industry Grouping

(4/14/2009)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding HBC) 21.55 7.12 » 65.35 1.12 0.85 » 2.95 15.94% 13.43%
*10 year range does not include current year values
JPMorgan Chase & Company JPM $115.4 Billion $30.70 33.42 6.16 » 105.66 1.39 0.70 » 2.74 18.00% 7.96%
HSBC Holdings plc ADS HBC $84.9 Billion $35.36 4.39 5.59 » 27.68 0.93 1.28 » 3.16 28.90% 14.26%
Wells Fargo & Company WFC $77.4 Billion $18.27 35.02 10.77 » 79.88 1.39 1.63 » 3.66 10.19% 15.46%
Bank of America Corp. BAC $64.6 Billion $10.09 23.88 7.76 » 88.43 0.50 0.44 » 2.94 18.21% 11.98%
Banco Santander ADS STD $53.6 Billion $8.57 3.61 2.47 » 31.46 0.98 0.69 » 2.89 22.62% 12.36%
Royal Bank of Canada RY $46.8 Billion $33.28 11.85 8.42 » 21.30 1.35 0.77 » 2.53 10.66% 19.40%
>
Ockham Ratings & Analysis Report
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The latest TV Media & Community Discussion

10:21:45 AM HBC $35.68 HSBC Holdings plc ADS
13 hours ago (04/15)
“…Can to reassure investors. And royal bank says we've got three bidders from the retail and commercial banking operations, includes HSBC. Standard chart terted bank and rbs down 3% and italian car maker fiat tells us if we can't get the labor unions to cut costs with chrysler we are going …”
9:05:13 AM HBC $35.32 HSBC Holdings plc ADS
14 hours ago (04/15)
“…Talking about banks, ril bank of scotland has three bidders for asian retail andommercial banking assets, wants to get rid of them. According to colleagues at wall street journal those bidders are HSBC, standard charters bank and the australia and new zealand banking group. This deal, this particular deal could get the royal bank of scotland 1.8 billion dollars as it sells off its assets. …”
6:36:31 AM HBC $34.65 HSBC Holdings plc ADS
Squawk Box
1 days ago (04/14)
“…One of the standout performers today gaining ground by about 4.5%, we saw a lot of strength going into some of the blue chip shares, especially the bluest chip of them all, HSBC. Investors cheering the bank's plans to sell three office buildings in london, new york, and paris. The idea is to raise about $4 billion in capital. And take a look at what happened in shanghai. …”
10:18:00 AM HBC $34.92 HSBC Holdings plc ADS
2 days ago (04/13)
“…Industry to help rebuild its economy, it's hoped with this project it will be able to double its output by the year and also the times is reporting in a number of other newspapers today reporting that HSBC, looking to sell three of its most prominent buildings for around 4 billion dollars. Some confirmation that this in fact is going ahead. They include the london …”
9:44:37 AM HBC $34.40 HSBC Holdings plc ADS
2 days ago (04/13)
“…It's up 2 1/2%. Cutting from out to perform to out performance, oppenheimer. The stock is expensive relative to earnings. Down 2%. London times report that HSBC confirming it's looking to sell three properties, london and paris, and offices in europe. The sales that could raise $4 billion, coming on the heels of a offering that raised 18 $1/2 …”
9:05:00 AM HBC $35.15 HSBC Holdings plc ADS
2 days ago (04/13)
“…Possible joint bid to develop the kirkuk oil field in iraq and that's interesting and times is reporting and confirming today. Reports confirm that HSBC is indeed going to sell three of the most prestigious and biggest office building around 4 billion dollars, including the london headquarters, canary wharf, in …”
8:19:47 AM HBC $35.15 HSBC Holdings plc ADS
2 days ago (04/13)
“…Force. The company is also expected to record write downs of about $2.2 billion, and scale back its dividend by as much >>> and the times is reporting that HSBC is looking to sell three of its most prestigious and biggest office buildings for around 4 billion bucks. The buildings include the group's london headquarters …”
3:36:04 PM HBC $35.02 HSBC Holdings plc ADS
6 days ago (04/09)
“…Abnormal heart rhythms and it's up 24.75%. Fedex higher despite analyst HSBC cutting the price target from $57 to $70. Not having an effect. Sometimes the stock tank on that movement up 5 2/3%. Take another look at wells …”
9:51:54 AM HBC $34.39 HSBC Holdings plc ADS
6 days ago (04/09)
“…So we think it's generally a good concept. It is something that we are looking at, frankly both as a buyer and a seller. >> final question. HSBC did that huge offering. David mentioned raising equity. Are you going at this point, is raising equity off the table or is that something you think you can do, take the government training wheels off and go out and do it quickly? …”
5:28:24 PM HBC $32.09 HSBC Holdings plc ADS
Fast Money
7 days ago (04/08)
“…Obvious spread trade of those who will give their tarp back or haven't gotten it versus those that have taken it? Do you buy the ones without? And what do you think of the guys across the pond like barclays and HSBC who don't -- >> I think you've got it exactly right, but the question is will the government allow the companies to pay their tarp back right away? >> wouldn't they take the money back to give it to people who need it because they're not going to get more from congress? >> that's what congress would …”
5:50:38 PM HBC $33.50 HSBC Holdings plc ADS
Happy Hour
9 days ago (04/06)
“…Do you take a gamble on this maybe you don't. Maybe, I could buy a whopper at mcdonald's or share at citigroup. Think about that when it comes to somebody like HSBC, there are value companies are not crooks. That's why I want to bring out these banking stocks, a la, channeling eric coming up next, cody will …”
5:50:04 PM HBC $33.50 HSBC Holdings plc ADS
Happy Hour
9 days ago (04/06)
“…Cheryl: am I cheryl casone or am I eric bollinging? I was told not to do "street meat" when eric went on vacation. I will do exactly what eric told me not to do and do his tell you about HSBC we got word that this company raised $18 billion with private capital. Hey, in this environment that is pretty good. Here is intraday, one-day stock closing higher by 88 cents. Look at one-year chart for company like HSBC. London-based company didn't take government money understand that. This is up here, $84 stock. Now it is $33. Can you tell me all the banks are bad when somebody like HSBC, again based in london but you can buy the states on call it adr, folks you can't bet. Look a lot of these stocks have been oversold. A lot are in trouble. …”
5:18:41 PM HBC $33.07 HSBC Holdings plc ADS
Fast Money
9 days ago (04/06)
“…>> goldman sachs. >> by the way, it looks like they're going to get that paid back and it looks like they already know the answer to the stress test, and that's the question, when do we find out the stress test. HSBC raised 19 billion today. >> I think most of these financials remain the ultimate in crap shoots. And you can trade them well. But given the visibility I think it's probably more like 12 days …”
4:52:07 PM HBC $33.07 HSBC Holdings plc ADS
9 days ago (04/06)
“…Including the country's worst ever business confidence survey. >>> and further down south the reserve bank of australia is also deciding on rates today. The market, though, split on whether it will cut or hold. >>> and HSBC says it's raised $19 billion from its rights this is after investors subscribed to 96.6% of the shares on offer. Tune in to cnbc world. Catch all the action overseas at …”
3:21:52 PM HBC $33.19 HSBC Holdings plc ADS
9 days ago (04/06)
“…Opportunity, bank of america offering 30-year fixed rate jumbo mortgages with rates in the high 5% range. Liking that. Market watch.Com, HSBC raises nearly $18 billion in offering. Chairman steven green saying the bank is well capitalized, liquid and profitable. While you're logged on, send me an e-mail at …”
2:05:52 PM HBC $33.08 HSBC Holdings plc ADS
9 days ago (04/06)
“…Issue stock with that sort of is there a market at all for companies like, say, a citigroup to raise money at any discount? >> well, I mean, it's a little tough to extrapolate what we saw from HSBC to the domestic banks I mean, outside of the siesz of their balance sheets there's not a lot of similarities. I think the key here is going to …”
2:04:56 PM HBC $33.05 HSBC Holdings plc ADS
9 days ago (04/06)
“…This year. That's right, adding 4,000 jobs. Jeffrey hart, the manages director to find out what this HSBC headline means. So jeff, what is your view on this. Comes out over the week. They had announced this a while they have a lot of big shareholders a lot of them in it looks like they're going to …”
10:20:07 AM HBC $33.01 HSBC Holdings plc ADS
9 days ago (04/06)
“…Last five or ten minutes and continuing down against the it's not the peso, british pound at 1.48. A couple of quick stories. HSBC saying they had a successful rights issues raising 18 billion dollars. Not bad at all 97% of investors, current investors that is taking up extra shares, HSBC up 21/2. Bark chase private equity, in house of barclays received approval to spin off from the parent company and infineon an …”
10:03:11 AM HBC $33.12 HSBC Holdings plc ADS
9 days ago (04/06)
“…Ubs, one of the largest to the royal bank of scotland. Asa got downgraded today. Huge insurance company, citing the debt there. HSBC is bucking the trend. The news there, they had a rather large offering there that was very, very successful. So let's take a look also at shares of ford. …”
9:31:50 AM HBC $32.66 HSBC Holdings plc ADS
9 days ago (04/06)
“…All financial it is will be under pressure right at the open. Erin did mention the HSBC was large, $18 million. Ibm and sun, appears that deal is not going to happen either sun turned it down or ibm with there are conflicting reports that deal apparently is on the …”
9:30:18 AM HBC $32.67 HSBC Holdings plc ADS
9 days ago (04/06)
“…Grain of salt with whatever you're analyzing for that. >> speaking of banks, by the way. HSBC, the giant hong kong, hey they bit the equity bullet. They haven't taken money and there's 97% done. We will see whether the u.S. Banks will follow. …”
9:26:49 AM HBC $32.72 HSBC Holdings plc ADS
9 days ago (04/06)
“…Alexis: wow, ashley. Ashley: you know what, we were sailing along fine and look at the u.S. Futures and everyone got the jitters and went downhill. As for the banks, they are going to suffer. The HSBC having an amazing day in europe and hanging on to that despite what mr. Mayo says. Alexis: how about you, mike? >> obviously, we were overbought, overdue with something like this. …”
9:05:46 AM HBC $32.67 HSBC Holdings plc ADS
9 days ago (04/06)
“…Performing bank stocks, says that the current investors took up 97% of shares being offered 0 so very successful. HSBC stocks up, after gaining 5% in asia. Barclays private equity, this is an in-house buyout division of barclays bank has received …”
8:17:32 AM HBC $32.61 HSBC Holdings plc ADS
9 days ago (04/06)
“…Gains. We were up as much as 1 1/2% here in london just two hours ago. Now, the banks have been in the lead leading those markets higher today. One of those HSBC announced that 95% of its rights issue was indeed taken up by shareholders. That meant that HSBC managing to raise close to 18 billion dollars in fresh capital. HSBC's stock up 3%. Barclays also up 2%. Meanwhile, in the auto sector, a report says that porsche may swap assets with volkswagen to …”
7:29:30 AM HBC $32.61 HSBC Holdings plc ADS
9 days ago (04/06)
“…In london on the ftse 100, up 17, 18 points, about 1/2%. All in all not too bad at all. Now, getting to the banking sector, HSBC says it has raised 18 billion dollars to a rights it says current investors taking up 96.6% of the shares being you could call that a success. HSBC's stock up 4 1/2% in was up as much as 5% earlier today in asia. Barclays private equity that's the in house buyout division of barclays has received approval to spin off its from parent. That's being welcome news by …”
6:38:14 AM HBC $32.61 HSBC Holdings plc ADS
Squawk Box
9 days ago (04/06)
“…Obviously. Stocks like the bank leading one big story both in the unltd kingdom and in asia well. I'm sure mauer will go give us more details, HSBC. 5% higher today, up over 60% before this session over the last couple of weeks or so. That is in part due to the fact there's great reassurance, …”
9:13:15 AM HBC $33.42 HSBC Holdings plc ADS
12 days ago (04/03)
“…Opposed such a move. So he's doing very well today, but his diplomacy skills will be put to the test tomorrow at the nato meeting. And HSBC flat. How about the auto sector, credit suisse upgrading the entire auto sector basically saying you know what, we think everybody is being too we think that the lack of demand …”
10:19:40 AM HBC $33.78 HSBC Holdings plc ADS
13 days ago (04/02)
“…Rates further by another 25 basis points or so. Still a record low for the ecb, but they're rather late to the party. I talked about the strong date for the banks. HSBC on fire up 10% in europe, gaining 15% in asia overnight and barclays up and deutche bank up 71/2% and what a day for the auto makers, I haven't said that too often. …”
9:09:22 AM HBC $33.44 HSBC Holdings plc ADS
13 days ago (04/02)
“…Considerably on the back of that. The stoxx 600 is up. We've been tracking sideways the banks are trading higher. They are up very nicely. Deutsche bank, HSBC making decent gains. But the auto sector is by far and away the big star of the day. Fiat is down in italy, now closely tied to chrysler. Up by 14.5% as we speak. …”
9:06:37 AM HBC $33.45 HSBC Holdings plc ADS
13 days ago (04/02)
“…And price stability, very gradual with the rate cutting compared to many other central banks around the world. As for the markets, connell is talking about the banking sector, among those HSBC here in london, up 10% after gaining more than 15% in asian trading, barclays up, and deutche bank up by 7 and maybe some risk appetite as well coming into the market, alexis, which is a good …”
7:16:49 AM HBC $29.51 HSBC Holdings plc ADS
13 days ago (04/02)
“…Seen a lot of strength in many sectors, but certainly in the financials and in the oil as for the banks, we have seen HSBC up 4, 5 percent, after a very strong day in asia as well. Lloyds bank up 6%. Spanish media reporting that the bank of spain is considering creating a second bailout fund for insolvent but financially …”
9:08:08 AM HBC $29.50 HSBC Holdings plc ADS
14 days ago (04/01)
“…For the stoxx 600 down. Oils are weak today pretty much across the board. Bp in london down 3.4%. But the banks are the flipside of that story. Let me show you HSBC, up 3.7% today. Erin, back out to you. >> thank you very much, guy from inside our studios there to outside in london -- i'm sore, we just went black there. There you go. …”
5:04:44 PM HBC $28.22 HSBC Holdings plc ADS
Fast Money
15 days ago (03/31)
“…The bank ceos. These guys were waxing how great a quarter it was. Suddenly today you had john mack telling you you, deutsche bank telling you that the profits were down. HSBC said only 40% through the deleveraging p it's interesting to me that nothing fundamentally changed to rally this sector. >> the first time of the year they were getting free money pretty much every day from the government. Last month, a year that they …”
9:03:45 AM HBC $27.76 HSBC Holdings plc ADS
15 days ago (03/31)
“…Cancellation rates getting they've been horrible the whole year. 21% now. This time last year 26%. A chuck the out of HSBC this morning, the stock up 5% ppt ceo basically said under no circumstances, no time or any circumstances would HSBC seek capital support from any government. Can you get any more definitive than that? I think not. Now we're also seeing big industrial companies cutting …”
10:21:00 AM HBC $26.74 HSBC Holdings plc ADS
16 days ago (03/30)
“…What headaches him qualifykwaul -- makes him qualified to run a car company, we'll see. Fiat down 9%, rough day for the automakers and the banks, HSBC down #% in london and banker santander, the huge spanish bank down, and the mood not helped when the spanish government was forced to come in and rescue a …”
10:04:20 AM HBC $28.72 HSBC Holdings plc ADS
19 days ago (03/27)
“…Three weeks and now, we're seeing HSBC is cheap. We tend to think that has to do with year end selling from you can go out now and putting clients into HSBC two years, 13 to 15%, that seems to be moving away, but it's still over 12%. You know, for a single a rated bank, one of the biggest in the world to have their two-year, …”
9:05:09 AM HBC $27.72 HSBC Holdings plc ADS
21 days ago (03/25)
“…Year pension after rbs was bailed out by the government. No word if anyone was at home, but he is reportedly shaken by the attack on his home. HSBC could cut as many as 1200 jobs in the u.K. In i.T. And human resources department and HSBC down 31/2% in trading this morning and the u.S. Dollar rather mixed now down against the euro, but up against the british pound. Ashley, thanks so much. Well, the durable goods data was better than expected and our …”
8:25:26 AM HBC $26.29 HSBC Holdings plc ADS
21 days ago (03/25)
“…Any of that money back. No one was home when the attack took place. >>> europe's biggest bank HSBC says it could cut as many as 1200 jobs. HSBC one of the better pour forming banks since the financial turmoil kicked in. HSBC stock, that is, down 3% on the morning. >>> german business confidence in march slipped to a record locating a deepening recession in the euro zone's largest economy. And you know what? …”
5:05:57 PM HBC $26.29 HSBC Holdings plc ADS
Fast Money
26 days ago (03/20)
“…>> do you like the foreign banks now? Are they at an advantage because >> the most impressive international banks are possibly HSBC. HSBC has issues in europe that they have to work out. San tan dare looks interesting, but you're right. I would never hold europe out to be a place that's got a lighter touch than the united states. …”
3:40:03 PM HBC $26.60 HSBC Holdings plc ADS
26 days ago (03/20)
“…Big news this week was the properties raising more money and secondary issuing. Probably not going to see any rights offering like from HSBC but there will be banking activity. The stocks will be further deluded. They have to refinance and the book values are lower. …”
View All HSBC Holdings plc ADS Comments

Key Fundamentals

HBC - HSBC Holdings plc ADS Fundamentals
Price (4/15 4:03PM) $36.47
Volume (4/15 4:03PM) 4.7 Million
Last Close Price $35.36
10 Day Average Volume 3.8 Million
13 Week Price Range $22.89 - $42.65
52 Week Price Range $22.89 - $88.15
LTM Revenue $1.6 Billion
 
Shares Outstanding (12/2008) 2.4 Billion
Market Capitalization $84.9 Billion
Shares Held By Institutions 136.9 Million
Institutional Holders 385
% Shares Held By Institutions 4%
Earnings Per Share (EPS) $0.05
P/E Ratio 707.20
Book Value Per Share $52.81
 
Gross Margin n/a%
Annual Dividend 2.00
Dividend Yield 5.70%
Beta 0.88
Fiscal Year Ends December