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Ditch NAB for this ASX 200 Bank Share: Funds instead


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One investment management firm has decided to short NAB shares and buy another ASX 200 bank share instead.

National Australia Bank Ltd (ASX: NAB) on Friday, the shares closed up 1.54% to $31.40. Meanwhile, S&P/ASX 200 Index (ASX: XJO) was down 0.80% on Friday.

Let’s see which ones ASX 200 bank share this foundation recommends.

Virgin money

NAB may be one of the big four banks in Australia, but Alan Gray Australia decided to add Virgin Money Uk Plc (ASH: VUK) into your stock fund instead. Shares in Virgin Money closed at 2.25 a.m. on Friday.

Investment specialist Julian Morrison told Virgin Money along with QBE Insurance Group Ltd (ASX: QBE) added to the portfolio “by weakness”.

Morrison said Alan Gray Australia sold the last of its NAB shares in the September quarter.

Commenting on the decision in the September 2022 Quarterly Review, Morrison added:

Virgin Money is facing some challenges – hence the low share price. But with a value that reflects roughly 0.5 net tangible asset value (NTA), the company is at a very substantial discount to other banks and allows for a significant margin of safety.

In comparison, CBA and NAB trade at price-to-NTA multiples of around 2x and 1.7x

Alan Gray’s Australian Equity Fund also includes exposure to Australia and New Zealand Banking Group Ltd (ASX: ANZ), Westpac Banking Corporation (ASX: WBC) and AMP Ltd (ASX: AMP). Morrison said:

In other financials, AMP outperformed the trend and contributed heavily to the outperformance. We also benefited from exposure to ANZ and Westpac.

However, Macquarie analysts recently advised investors to buy NAB share price. Analysts have set a price target of $32.25 on NAB shares. Of all the big four banks, Macquarie ranks NAB as the best bank to buy.

Stock price snapshot

NAB shares are up 9% over the past 12 months and year-to-date. Meanwhile, Virgin Money shares have fallen 39% in the past year and 32% since the start of the year.

By comparison, the ASX 200 is down 10% year-to-date and year-to-date.


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