The National Australia Bank Ltd. (ASX: NAB) share price is down 8.11% in just one month.
Indeed, despite the company releasing no material news, the market appears unimpressed by the bank's trailing dividend yield of 6.6% fully franked. Grossed-up for those tax-effective franking credits, that's a whopping yield of 9.4%!
Can the NAB share price go higher from here?
NAB's new CEO, Andrew Thorburn, has made sweeping changes to the bank's non-core assets, including the partial divestment of its life insurance business, to Japan's Nippon Life; and Great Western Bancorp, located in the USA. Earlier in 2015, he also announced the divestment of the bank's troubled Clydesdale Bank in the UK.
However, while these strategic initiatives have, and will continue to, spur investor sentiment, NAB faces regulatory risk, increased competition and the prospect of rising bad debts over the medium term.
Buy, Hold or Sell?
NAB's new management are taking strides to steer the bank in a positive direction. However, with a cut to Australia's economic growth forecasts increasingly likely, and credit markets expected get more competitive, I'd steer clear of buying back stocks, at least for the foreseeable future.
