November was a great month for most shares on the S&P/ASX 200 Index (ASX: XJO). Over the month just passed, the ASX 200 added a rosy 4.5%, ending the three-month slump that we endured over August, September and October. But Bank of Queensland Ltd (ASX: BOQ) shares did even better than that.
The ASX 200 bank share started last month trading at $5.10, just a whisker away from the new 52-week low of $5.07 that it had hit at the back end of October. But fast forward to last Thursday, and those same shares were asking $5.50 each.
That means that Bank of Queensland shares clocked in a November performance of 7.8%, almost double the performance of the broader market.
So why did this non-big four bank have such a spectacular month last month?
Right off the bat, there's no obvious catalyst that we can point to explain this impressive share price performance. It was a relatively quiet month on the markets for this ASX 200 bank share, with no major news or announcements out of the company.
Why did the Bank of Queensland share price almost double the market in November?
Of course, it was a different story in October. That was when BoQ reported its full-year earnings for FY2023, which investors gave a big thumbs down to at the time. As we covered back then, these earnings had Bank of Queensland report a 70% tumble in statutory net profits after tax to $124 million, as well as a dividend cut.
When those earnings came out, it resulted in a 7% fall in the BoQ share price. After a bit of a bounce back the following week, pessimism returned, and the bank was down to that new 52-week low by the end of the month.
Thus, it's possible that investors collectively decided that the bank's shares were entering oversold territory, and subsequently flocked back in.
This might have also been assisted by the large short position that Bank of Queensland shares have found themselves in in recent weeks. When a company has a lot of its shares held short, a big share price surge can result in a short squeeze, giving the recovery even more legs.
But we should also point out that BoQ was not the only bank to experience a big month last month.
Take Commonwealth Bank of Australia (ASX: CBA). Its shares also had a November to remember, soaring 8.4% last month. That was decidedly the big winner, but Westpac Banking Corp (ASX: WBC) had a nice time of it as well, bouncing 3.74%. Clearly, there was at least some goodwill in the banking sector going around.
So it was probably a combination of these factors that resulted in Bank of Queensland shares' stellar month last month. No doubt shareholders will be hoping the party continues into December. But we'll have to wait and see.
