This is banks week...
Very interesting bank and again another under evaluated one at 0,67 (earnings to book value) compared to other banks in the same category where their book value ratio is either very close to 1 or higher.
So, what is wrong with STI??? REVENUES AND PROFIT. Again the main problem is net profit and higher revenues meaning a larger market share.
But second half of 2012 will help regional banks that were solid enough to clean their house and their very bad portfolio still maintaining their tiers ratio. They will be able to grow based on new loans not on expenses reduction.
STI has been able to do that and it's now on recovery path.
I will not expect a very high return sor STI this year, but i do not expect volatility to be high either.
STI will start moving into a trading range (22$ to 24$) and when profit hits then that range will move higher, dividend could be increase etc. I expect a share value of around 30$ by year end. (Still a good 20% return)
So i will open a small position and start accumulating STI. In the long run, this will be a winner.
As usual (and more actually) DO NOT INVEST MORE THAN YOU CAN AFFORD TO LOSE and always do your own due diligence before investing in any stock. CHEAP SHARE PRICE does not necessary mean a real bargain. Play with extreme caution.
Get THE PLAY OF THE DAY on Twitter : @investman2
Very interesting bank and again another under evaluated one at 0,67 (earnings to book value) compared to other banks in the same category where their book value ratio is either very close to 1 or higher.
So, what is wrong with STI??? REVENUES AND PROFIT. Again the main problem is net profit and higher revenues meaning a larger market share.
But second half of 2012 will help regional banks that were solid enough to clean their house and their very bad portfolio still maintaining their tiers ratio. They will be able to grow based on new loans not on expenses reduction.
STI has been able to do that and it's now on recovery path.
I will not expect a very high return sor STI this year, but i do not expect volatility to be high either.
STI will start moving into a trading range (22$ to 24$) and when profit hits then that range will move higher, dividend could be increase etc. I expect a share value of around 30$ by year end. (Still a good 20% return)
So i will open a small position and start accumulating STI. In the long run, this will be a winner.
As usual (and more actually) DO NOT INVEST MORE THAN YOU CAN AFFORD TO LOSE and always do your own due diligence before investing in any stock. CHEAP SHARE PRICE does not necessary mean a real bargain. Play with extreme caution.
Get THE PLAY OF THE DAY on Twitter : @investman2
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