my latest call on nab

Those that follow my banking calls will know that I am normally not too far from the mark. To wit, after the forex scandal broke I called it a lot lower than most and was correct. After this latest downgrade, with NAB at $28.50 and many saying yield would hold the price, and I called it to settle $26-$28.

Well, I will now stick my neck out and confirm my view that NAB will bottom at $26 at the worst (all other things being equal).

This view is using a 2 year projection of a fair value, calculation based on forward e.p.s., p.e.r. and payout ratio's, vis-a-vis the other 3 banks comprising the big 4.
I have assumed a growth factor for NAB (using a lowered 2004 starting point) of 4% pa for NAB and 8% ps for the others.

With a 2 year view I reckon one would be very safe starting to buy around these levels, and averaging down (if need be).

For those currently calling NAB sub $24, and want to ridicule my call - go ahead. But before you do so, check out my track record over the past couple of years.

Similarly, you may also want to post your basis and credentials for an alternative view.