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The Lloyds share price is low! Here’s my plan to get rich off this stock

I think an investment in Lloyds (LSE: LLOY) right now could potentially make you rich. Here are some facts. The Lloyds share price is down 47% year on year. The company’s earnings for the first quarter in 2020 has dropped a whopping 60% from the same period last year. Demand in the housing market is down sharply, and interest rates are at an all-time low. Both of these factors translate to less income for the company. It has also become very costly to run all 1,100 of the company’s branches during Covid-19.

These trading conditions are a catalyst for disaster, and the Lloyds share price reflects this. But this can be good news for the savvy investor as it presents a unique investment opportunity, in my opinion. Here’s why.

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You CAN teach old dogs new tricks

There is some light at the end of the tunnel. In 2018 Lloyds introduced a new strategy, and I believe this gives us insight into how the company can recoup profits, leading to the Lloyds share price bouncing back. At the core of its plan was to improve customer experience. It is an excellent start since “the customer is always right” and the company planned on doing this in three ways.

Firstly, further digitisation of the group. The more “we” as the customer can do from our couches, the less Lloyds has to spend on branches. Also, to attract younger customers, the company needs to keep up its online presence to stay relevant. Lloyds seems to be on the right track here.

Secondly, the company plans to maximise its current offerings. This includes an additional £6 billion in loans to start-ups and SMEs. There is definitely more risk involved, but with such low-interest rates, Lloyds needs to increase the volume of loans.

Thirdly, transform the way the company’s employees work. The target here is to improve efficiency company-wide by 30%.

The ultimate purpose of the strategy is to make things more efficient, grow revenue streams and reduce costs. All this should contribute towards pushing up the bottom line. And for a while, it seemed to be working: Lloyds’ share price showed signs of strength, until Covid-19 hit.

The bigger picture

At its core, Lloyds is a good company with sound fundamentals. Over the past five years, its historical annual earnings growth is 24%, which is exceptional. The bank’s liabilities consist of low-risk source of funds, which consequently lead to a low level of loans gone bad at only 1.3%. The company has a robust network of customers and a solid product offering. Despite Lloyds’ shares currently being low, I think they still have a lot to offer.

In my opinion – once the dust settles, the masks come off, and life returns to “normal” – interest rates will rise and demand in the housing market will once again reach all-time highs. Lloyds’ strategy should continue to pay off, and its operating costs will likely be considerably lower than before the pandemic. This is a recipe for success, and I think it could lead to the Lloyds share price reaching all-time highs.

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Miles Williams has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.