BUY BANCO MACRO SA (BMA) Stock Pick Analysis by Fliujniligui on People & Picks

S&P 500: 1,340.35 Change: -0.84%

P&P Score: 2.54 | Points: -69.40 | Accuracy: 54.76 | Average Pick Score: 10.40 Annual Return: N/A

Commentary

BUY: BANCO MACRO SA (BMA) Rating: 1

Start Price:	$18.36
Points:	+51.65
Created:	08/10/2009

This is a bank I should have bought way earlier than now. It happens I analyse it correctly and take the required time now. The capital is insanely high, the NIM is crazy good and the loan quality stays acceptable. Furthermore, this bank had more than a stress test in 2002, Argentina defaulted on its debt, and yet it returned to profitability just after... After all, when you are well managed, it seems the country default is just a bump on the road. This bank seems able to survive anything short of a country default and even in this case, it seems to have high odds of surviving and growing with some fire-sale of competitors' assets. I am gonna hoard it tomorrow.

http://www.macro.com.ar/dnl/infoFinanciera/bm_presentation_1208.pdf

1 Comment(s):

Author

Fliujniligui Date

Date

2011-05-21 20:20:24

I really like this company. However the share price shoot to 54$ was totally unjustified and I think that was got in from 30 to 54$ was dumb money and it must go back out. BMA has 1.05 billions $ equity and 2 billions $ market cap. Its earning power is unprecedented, its yield is fat, but Q1-2011 was a little bit worse than Q1-2010, just what it takes to bring it lower and as often seen, a trend is maintained beyond fundamentals.

I am crazy about BSBR being at market cap lower than book value in Latin America and this is my pick. BMA is my second LatAM banking pick but I will consider to get back in at lower market cap / equity ratio. Anything under 1.5 is a decent entry point from which to accumulate as the valuation gets cheaper.

This bank survived 2000 Argentina default, a real stress test few banks can stand.

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