My stock tip for today is Banco Santander (Brasil) (BSBR), a subsidiary of Banco Santander that’s based in Sao Paulo. Santander is a big operation, with a market cap of $21.5 billion. This Brazilian bank came public at 13 last October, and after a post-IPO droop, managed to push above 14 in December and early January. But since then, BSBR has been under heavy pressure, falling along with the global finance sector.
My stock recommendations usually follow the traditional Cabot growth disciplines, so it’s unusual to shout out a stock that’s just fallen back toward its lows this month. But I think it’s okay to put a stock on a Watch List even if it’s had a brick on its head for a few weeks.
Here’s why.
Santander is a full-service bank with over 2,000 locations in southern and southeastern Brazil. It does commercial and wholesale banking as well as asset management and insurance. The company’s Q3 earnings were up 100% on an 84% jump in revenues, with an after-tax profit margin of 12.0%–that’s registering a multi-year high.
With a trailing P/E ratio of 19 and a forward P/E of 10, it’s certainly cheap enough. Plus there’s a hint in the chart that the stock might actually find support at 12.
Big solid company, thriving home economy, cheap stock price, small dividend … that’s enough to put an emerging market stock on my Watch List. And when it shows some signs of life … well, we’ll see.
If I decide to put BSBR in the portfolio of the Cabot China & Emerging Markets Report, you can be among the first to know by trying a no-risk introductory subscription (for new subscribers only).