Are bradford & bingley shares worth buying?

Question

i have been offered the opportunity to purchase B&B shares at the new reduced price of 55p,offering one for each share already held. also in the offer is the chance of selling your rights to buy these shares can anyone say if they are a good buy and explain the sell off option if i do not wish to buy anymore shares.thanks

Answer 1

The company is offering Right Issue at 55p to its existing shareholders. I think you should take up your Right Issue(unless the price of the Rights is higher than the present market price of the B&B shares) to average the cost of your investment in that company.  B&B is the largest UK buy to let property sector, when the credit crunch bottomed, the property market should pick up.

Answer 2

If you don't want to buy any more shares then you've answered your own question - sell the rights.  B&B's business is largely in the buy to let sector.  If you believe that in the medium to long term property prices will increase (as they must if only because the supply of land is fixed while the population is growing) then take up the rights - shares should be viewed as a medium to long term investment and not an opporttunity to get rich quick.  If you aren't prepared to wait take the cash.

Answer 3

MAYBE for a short term price punt, but even that I would say no

Long term ... no way! They're TOO exposed to the mortgage sector, and will be one of the first banks in a long list globally to go under