I’d waited ages to bag HSBC (LSE: HSBA) shares at a decent discount and on 5 May I finally got my chance.
That morning, I logged on to find the shares had fallen more than 5% as markets reacted badly to its first-quarter results. Immediately, I perked up.
If the HSBC share price had jumped 5%, I wouldn’t have gone anywhere near it. Early spikes often fade as profit takers emerge. But sharp dips can create opportunities, provided the underlying business still looks solid. The more I read HSBC’s numbers, the more confident I felt.
Underlying revenue climbed 4% to $19.1bn, but there were weaker spots. Return on tangible equity slipped from 17.9% to 17.3%, but I wasn’t too concerned. Excluding one-off items, it actually came in at 18.7%. Management also kept existing 2026 guidance intact.
Why did I buy HSBC shares after the dip?
HSBC is a vast organisation with countless moving parts, but I felt the machinery was still pulling in the right direction. I also wondered how long I’d have to wait to get another buying chance like this. With a forward price-to-earnings (P/E) ratio around 11.2 and a forecast dividend yield of 4.6%, the valuation looked attractive to me.
The shares retain bags of momentum. Even after the dip, they’re up more than 50% in a year. So I dived in.
So far the decision has worked out nicely. My shares have already climbed roughly 9%. But these are early days. At The Twelfth Magpie, formerly The Motley Fool UK, we aim to buy shares with a long-term view. I’m talking five, 10, 15, or 20 years and beyond. The real rewards of investing come from years of compounding through both capital growth and dividends. Buying on dips means we start from a lower point.
Link: https://uk.finance.yahoo.com/news/bought-hsbc-shares-may-buy-055900665.html