Global Value Investing

[Drexion2004]

BBAS3.sa/BDORY.pk: I'm getting very tempted to join into this 'Banco Do Brasil' stock. You get roughly a 7% dividend and a company trading at around 5.5 times P/E and 1x P/B. This is a company which historically has gotten ROE's of 20%-ish.

Its controlled by the Brazillian government and trades at a very steep discount to private brazillian banks because of that (The discount is wayyyyy too high right now at over 42% the last time I looked compared to ITUB). At the same time it has HIGHER loan growth than other Brazillian banks and better asset quality (lower NPL's).

Very solid bank ratios such as tier 1, etc etc (All Brazillian banks do actually). I don't think its traded this low on a P/B ratio for a long time (if ever) -- Not even in the 2009 crisis since their shareholder equity has grown 60% since early 2009.

-Fernando