Westpac Share Price is Climbing Back Up: Should You Buy the Westpac Dip?

At time of writing, the share price of Westpac Banking Corporation [ASX:WBC] is up .64%, trading at $25.14.

If you look at the history of the Westpac share price over the last 12 months, you can see that it appears to have found support around the $24 mark:

Westpac share price

Source: tradingview.com

The Westpac share price is climbing back up since the New Year, after the AUSTRAC scandal wreaked havoc on the company. We take a quick look at whether this is a buying opportunity.

Four things to consider when assessing the current Westpac share price

Here they are:

  1. Banks are struggling to adapt to technology and a changing regulatory environment
  2. Fintech is on the rise
  3. This could lead to ‘old money’ Big Four banks making acquisitions in the ‘new money’ fintech sector
  4. As a result, you need to be discerning when looking at fintech and bank stocks

It’s all about competition, really.

We saw Commonwealth Bank of Australia [ASX:CBA] make an investment in Klarna — a European Afterpay style company.

CBA for instance, is now pulling away from the pack and has broken through resistance at $82 dollars — something which it brushed up against/briefly pushed past six times.

Matt Hibbard explains why CBA may have an edge in this new environment here, by the way.

But going back to Westpac — the key going forward will be what its next acquisition might be — if it makes one.

The Big Four know change is on the horizon (decreases in profitability) — the CEO of Australia and New Zealand Banking Group [ASX:ANZ], Shayne Elliot, admitted it himself not so long ago.

If you still believe there is more room for the Westpac share price to run, you may be right for a time.

Scandals frequently create market overreactions.

The big trend however, is towards an increasingly challenging and competitive environment for the Big Four.

You could for example, buy the Westpac dip hoping it makes smart acquisitions and balance out this perceived safety with a supposedly riskier buy in the fintech space.

Go both ways, so to speak.

But whichever way you look at it — money is changing. How we use it, which institutions we trust with it — and the technology we use to govern its movement.

So if you enjoyed this analysis, consider taking out a free subscription to Money Morning. In it you will find our Editors’ unique blend of financial analysis — ideas you won’t get from other outlets.

Regards,

Lachlann Tierney,
For Money Morning

PS: Discover Ryan Dinse’s three small-cap tech stock picks that could be set to boom in 2020. Download your free report here now.


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. Ryan is involved in three publications:


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