Bank Intangible Assets
Posted on Tuesday, March 18th, 2008 | In Current Market NewsThe number of analysts predicting major further price declines for banks and related companies is increasing by the day.
To work within that perspective we have begun to look at statistics that may begin to show excess valuation or over-leveraging that may be squeezed out in coming market sessions.
We are awaiting the quarterly reports that will provide the capital adequacy ratios for banks. That ratio is fundamental to credit ratings and capacity to grow, as well as to risks arising from the deleveraging that is sweeping the globe.
Pending that, we thought it might be interesting to see the extent of intangibles banks, savings & loans and consumer lending companies are carrying on their books.
Intangible assets in the balance sheet do not have separate value from the capitalized earnings of a company, and they have no value in liquidation.
We examined entities with $1 billion or more in market cap as of March 14.
The first table below lists 40 companies with the highest percentage of intangibles to market cap. It also shows the market cap to tangible book ratio for those companies.
High Ratio of Intangible Assets to Market Cap
Click to enlarge
The second table below lists 40 companies with the lowest percentage of intangibles to market cap, as well as their market cap to tangible book ratio.
Low Ratio of Intangible Assets to Market Cap
Click to enlarge
It is grist for the mill for those who chose to invest in individual stocks instead of funds, and who do their own research.
Richard Shaw
QVM Group LLC
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 About Richard Shaw (http://www.QVMgroup.com)
Richard is a principal of QVM Group LLC, a fee-based investment advisor based in Connecticut with clients across the country. He provides investment coaching to "do-it-yourself" investors, and manages portfolios for those who prefer not to make their own decisions. His investment approach is based on value, asset allocation, benchmarking, expense control, risk management, customizing portfolios to each client's specific circumstances, and regular communication about strategy and performance. The QVM Group team also provides municipal refinance services, strategic business planning and financial analysis service for new ventures, private acquisition analysis, and custom investment research. Richard's extensive experience, includes serving on the Board of Directors of Aberdeen Asset Management PLC (London Stock Exchange: ADN), membership on the Board of Directors of Phoenix Investment Counsel (renamed Virtus Investment Advisors), a U.S. pension manager and investment advisor to the Phoenix Funds (renamed Virtus Funds), as well as serving as Managing Director of a series of offshore investment funds based in Luxembourg. He has led institutional asset management sales and had overall responsibility for management of a U.S. mutual funds broker-dealer. He was a charter investor and member of the Board of Directors of several internet companies, including Lending Tree prior to its IPO. He is a graduate of Dartmouth College. QVM Group LLC is a Registered Investment Advisor. Visit the QVM Group website http://www.qvmgroup.com/QVMinvest/ |
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