ASX investors who own National Australia Bank Ltd (ASX: NAB) shares would probably be looking at some significant profits to their name today, at least on paper.
Shares of the ASX 200 bank stock have been on fire in recent months. Since the beginning of 2024, NAB shares have surged by a whopping 23%, going from $30.86 in early January to the $37.90 we are seeing today. That gain stretches to an even more impressive 33% over the past 12 months.
ASX bank investors would be used to the ebbs and flows of their shares. However, NAB's recent performance goes beyond the ordinary fluctuations of the banks. NAB shares today are trading at levels ASX investors haven't seen for years. The last time we saw NAB at close to the $38 mark was way back in early 2015. And back then, it didn't last long.
Before that, you'd have to look all the way back to pre-GFC 2007 to find the last time that NAB was commanding the valuation we are seeing right now.
Check that all out for yourself below if you need some visual affirmation:
As such, it's a reasonable assumption that anyone who bought NAB shares longer than a few months ago would be sitting very pretty indeed right now.
But now that these gains are lodged in shareholders' brokerage accounts, many investors might be getting itchy fingers and wondering if they should crystallise some of these paper gains and take some money off the table.
So should they?
Are NAB shares worth selling after rising 23% this year?
I think that NAB investors should indeed consider taking some cash off the table today, especially if they are sitting on a sizeable gain from their investment.
From my perspective, the rally that we've seen in all of the big four banks over the past year is unsustainable. As we discussed this morning regarding Westpac Banking Corp (ASX: WBC), this rally has come despite no material increases in these businesses' actual profitability.
In NAB's case, the bank's most recent earnings showed NAB going backwards. The company reported a 12.8% drop in cash earnings to $3.55 billion over the six months to 31 March, as well as a 0.9% fall in net operating income to $10.14 billion.
Yet its shares have gone on to reach new heights ever since.
I'm not expecting any huge blowouts in earnings or profits over the current financial period either. So I would be far more surprised to see NAB shares rise substantially in the months ahead than if they stagnated or dropped off.
NAB is a great dividend stock, and if maximising franked dividend income was a primary goal of my investing portfolio, I would hang on to NAB stock. But if it's not, I would seriously consider finding a better investment to park my cash in right now, as I am currently doing myself.
