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Why have traders been buying Virgin Money shares recently?

Why have traders been buying Virgin Money shares recently?
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Trading platform, Fineco Bank has released data on the most traded stocks on the platform this past week. According to the data, one of the top movers is Virgin Money with the bank’s shares trading at 100% volume buy.

So why exactly have traders been buying Virgin Money’s shares recently? Let’s find out.

What’s happened recently with Virgin Money?

A few weeks ago, in an unscheduled trading update, Virgin Money announced that it was revising its strategy to accelerate its transition to digital banking services. However, it warned investors that it would have to spend more money to achieve its objectives.

The company stated that it intends to cut £175 million from its costs over the next three years, but that this will incur up to £275 million in restructuring costs. The cost-cutting strategy would include reducing the number of branches and offices in favour of remote banking.

During the same trading update, the bank stated that it was on track to return to full-year profit and that it would pay a 1p per share dividend to shareholders.

Furthermore, Virgin Money stated that its statutory profit before tax for the fiscal year ending 30 September is expected to be £417 million, compared to a loss of £168 million the previous year. Profits before taxes are expected to rise 546% from £124 million to £801 million. This was attributed to the company’s “strong financial momentum and improved macro outlook.”

In other good news, the bank’s underlying income increased by 2% to £1.57 billion.

Despite Virgin Money’s announcement of a return to profitability and the reinstatement of dividends, its share price witnessed a significant drop shortly after the trading update.

It could be that investors expected even more growth in profits and revenue. Or it could be that they were concerned with the company’s planned cost-cutting measures, including the huge cost of achieving its objectives.

Why have traders been buying Virgin Money shares recently?

According to Fineco’s latest data, Virgin Money was the second most traded UK stock this past week at 100% volume buy.

With Virgin Money’s share price tumbling after its unscheduled trading update, it’s likely that some investors saw this as a chance to scoop up the company’s shares at a discount before they potentially start rising again. That could explain the 100% volume buy witnessed this past week.

What other shares have investors been buying and selling?

Here are the top 10 companies in terms of trading activity this past week according to Fineco.

Rank

Company

Volume buy %

Volume sell %

1

VELOCYS

81%

19%

2

VIRGIN MONEY UK

100%

 

3

JOHNSON MATTHEY

92%

8%

4

IMPERIAL BRANDS

37%

63%

5

JOHN WOOD GROUP PLC

49%

51%

6

ITV

19%

81%

7

XP POWER

100%

 

8

PERSIMMON PLC

5%

95%

9

SAGA

56%

44%

10

AIRTEL AFRICA

85%

15%

How can you buy shares in Virgin Money?

If you are interested in buying shares in Virgin Money or any other publicly traded company that you think has good long-term potential, the easiest and often the cheapest way to do it is through an online share dealing account. If you don’t have one already, take a look at our comparison of some of the top-rated share dealing accounts.

You can also open a stocks and shares ISA that you can use to shield your investments from tax. So, if you want to invest as tax-efficiently as possible, an account like the FinecoBank stocks and shares ISA may be the way to go.

As always, don’t forget to do your research before you put your money into any investment and seek professional advice if necessary.

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