Barclays (LSE: BARC) shares have been on a robust run. 12 months so far, the inventory’s risen 45.3%. Within the final 12 months, it’s returned 42.6% to shareholders.

By comparability, the FTSE 100’s up 7.5% and 9.3% throughout the identical timescales. Whereas shopping for index trackers can show to be an efficient solution to construct wealth, if I’d invested in Barclays as an alternative I’d be a cheerful investor.

However it will get even higher. As an investor who buys shares with the goal of holding them for a minimum of 5 years, it is sensible to try the banking stalwart’s efficiency over that interval. As soon as once more, it’s outperformed the broader index, climbing 49.7% in comparison with the Footsie’s 11.8% rise.

Whereas that’s all properly and good, it does beg one query: is there any additional for Barclays inventory to go? Effectively, I’d reply sure. And if I had the money, I’d snap up Barclays for my portfolio at this time. Right here’s why.

Cracking worth

Regardless of hovering within the final 5 years, the inventory nonetheless seems to be low cost as chips. For instance, its price-to-earnings (P/E) ratio at present sits at a mere 8.9. Granted, all FTSE 100 banks look good worth in the intervening time. Nonetheless, that’s nonetheless significantly decrease than the Footsie common of 11.

Moreover, its ahead P/E is available in at 6.9. That’s additionally low cost as chips. And that low valuation seems to be like a superb deal for a enterprise of Barclays high quality, in my opinion.

One other solution to painting its low cost price is by wanting on the price-to-book (P/B) ratio. It is a extra widespread metric for valuing banks. The agency’s P/B is simply 0.5, the place 1 is commonly thought of honest worth. Once more, that highlights that even after its rise, Barclays might have additional to go.

The enterprise

However how’s the enterprise shaping up? Granted, the inventory seems to be low cost. However what could possibly be in retailer for the financial institution within the coming years?

Effectively, I believe the instances forward could possibly be affluent. I say that largely as a result of current strategic overhaul the enterprise introduced. For years, Barclays had been scrutinised for falling behind its competitors. CEO CS Venkatakrishnan has put in movement plans to alter this.

As a part of this, the agency’s aiming to chop up to £3bn in prices by 2026. To realize that, Barclays will streamline to function underneath 5 divisions. This could assist enhance effectivity and enhance accountability, in accordance with the financial institution.

Potential threats

Whereas that does sound thrilling, restructuring’s at all times a risk. Say Barclays doesn’t obtain its targets. That would depart shareholders disenchanted and will see its share price undergo.

In addition to that, the financial institution can even be negatively impacted by falling rates of interest. The Financial institution of England lower the bottom fee by 0.25% to five% in August. Additional cuts are possible within the months forward. It will shrink Barclays’s margins which, in flip, will squeeze its earnings.

I’d purchase at this time

However whereas the enterprise might face some short-term volatility, I see actual long-term worth within the inventory even after its spectacular efficiency in current instances. I reckon it could possibly be the most effective bargains on the FTSE 100.

I’m hoping to have some investable money over the approaching weeks. I’ll be choosing up some shares.