Commonwealth bank of Australia (ASX: CBA) shares could hit $100.
Can Commbank shares top $100 in 2017?
The question of when a stock will hit a price is a different question altogether. Beware anyone that tells you a stock will do something.
Even analyst 'price targets' are just that – targets. Their stock estimates are based on what a company is worth – not its price, which will fluctuate willy-nilly.
Having said that I believe Commbank shares could hit $100 sooner or later.
Why?
For starters, it is Australia's biggest company by market capitalisation.
And being a bank that is integral to our country and economy Commbank is heavily regulated to ensure it operates in a manner effective to serve its customers. Shareholders can find comfort in the level of scrutiny to which it is subject.
But Commbank is also Australia's most profitable large bank, has the most deposit funding and the greatest market shares in key products like mortgages. If you closed Commbank today, I reckon it would continue to post a profit because of its interest earning assets. Indeed, the 'tail' of its decisions today is what counts tomorrow.
It also pays a meaty 5% fully franked dividend.
Foolish Takeaway
Betting on short-term price movements is a (lowercase 'f') fool's errand. Weighing up the long-term fundamentals of a business is the best way to make a mint in the sharemarket, in my opinion.
For the record, I think Commbank shares are a little overvalued at today's prices and would start to get excited if they fell below $75. However, I also think that over the next decade there may indeed come a time when the bank's stock is worth more than $100.
Although buying Commbank shares for the dividend would not be a terrible idea, given human emotion moves in cycles and not trends there will come a better time to buy Commbank shares, in my opinion. Remember patience does not lose you money.
