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Prosperity Bancshares Inc. Message Board

  • poorboy7 poorboy7 Aug 24, 1998 1:19 PM Flag

    For what's it worth dept.

    In the past such downturn slides with scare me
    into a irrational sell- Although, I feel somewhat of a
    novice investor it appears to me this is a good buy
    opportunity. Eventually, it will reach the upper 40's and meet
    just about everyone's expectations.

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    • But the upside reaction seemed a tad excessive,
      IMHO. A good signal of support for Latin American
      economies, but a easing of U.S. interest rates is just one
      component of a solution. Other high rate countries (esp
      Germany) need to follow suit. And, more importantly, there
      are still some tough domestic calls that need to be
      made to deal with their issues.

      Glad to see a
      bit of a pullback this morning, actually. I prefer a
      slower, more gradual, more sustainable movement.
      Unfortunately, I should be used to this stock's gyrations by

      Did anyone catch whether KO actually issued a warning
      or what was the nature of the mysterious meeting
      this morning? Did they talk about Latin American

    • You probably already know this, but the news is
      that Greenspan strongly hinted that feds will drop
      interest rates. Also todays news that they will help bail
      out huge losses in a big hedge fund,Long Term Capitol
      Mangaement. Also Clinton tapes were seen as helping him, and
      the Linda Tripp tapes soon to be released will
      probably help.

      My reading is the Feds are going to
      support Brazil and Mexico.

    • Looks like we have lift-off today. Wonder how
      sustainable it will be. Looks a bit much, a bit fast...of
      course we dropped like a rocket too. I much prefer the
      current direction.

      Is some earnings new leaking
      out? Other news? Have they cancelled the financial
      crisis in Latin America? (I must've missed the memo) Did
      Bill promise to keep his pants on? Did Al Greenspan
      scold us for irrational lack of exhuberance? Or are we
      just correcting from our oversold condition? Anyone
      have any thoughts?

      Did everyone notice PB is
      continuing to expand...picked up another Brazilian


    • I've seen a few articles like the attached.
      Apparently many of the analysts and funds that were bailing
      are concluding they over-reacted and are buying back
      in. This probably helps explain the healthy runs
      we've enjoyed the last few days (on high volumes). Hope
      the long-term investors haven't been shaken by the

    • CocaCola is using this company to open and drive
      their corporate growth in Latin America. During this
      period of economic crisis, they will concentrate in
      building their market. More smaller bottlers will be
      aquired and advertising is cheaper. When the economic
      rebound comes, they will be bigger and more profitable
      than if the current crisis didn't happen. As
      investors, we can take advantage of the weak holders and
      margin squeezed sellers by buying it at tremendous
      bargain prices. Coca-Cola is probably the best growth
      trademark to dominate its Latin market.

    • I simply maintain that the market is
      over-reacting to POTENTIAL bad news. And, yes, this stock
      already has much of it already factored into the price.
      Sure, a recession throughout Latin America is possible,
      and one in the United States is possible. And the sky
      really could fall.

      PB's price drops generally
      preceded the market drops in most of the relevant Latin
      American countries. Recent activity has been fairly
      modest, especially considering the continued hammering
      those countries' markets are taking.

      IMHO, recessions are far from certain, I'd even say
      unlikely. Latin America is in a stronger position than the
      Asian countries to resist some of the pressures they
      are currently being subjected to, and several of
      those countries are actually doing reasonably, from a
      fundamental standpoint. PB is well-positioned to ride out
      recessions, anyway, even if it covers the whole region. If
      there is one, how deep and how long? Would you or
      anyone else have predicted recession at the beginning of
      this year? Recall, also, that PB is not a one-country
      stock, it covers several countries.

      If you happen
      to be a good market timer, you'll make a lot of
      money. And after you've got a record of doing it
      successfully for several market cycles, I might actually pay
      attention to your timing comments. I simply don't know many
      good market timers.

      I see much more upside
      here, than downside, even in the short-mid term. For
      the long-term, I certainly see significant upside,
      and I think this a great entry price. Will there be a
      better one...maybe...maybe not. You can wait and bet on
      it, if you want to. I won't.

      But I know I'll
      be here to enjoy the next round up, however long
      that takes. Trust me on this one, when this stock
      moves, it's like lightning, in either direction (as
      we've just seen on the downside). I prefer to catch a
      falling knife than a shooting star.

    • You seem to think the market has already
      "discounted" a worst-case scenario in Latin America. That's
      the same logic Lehman was using when they were
      shouting "buy" at 28, because FY99 EPS couldn't possibly
      be worse than $1.66.

      The market has
      dicounted a finite probability of Venezuela suffering a
      40-60% devaluation (probably about 90%), and a certain
      probability of Brazil running into problems rolling over its
      debt (p=25-40%).

      If Brazil does run into
      problems, you can bet the stock will be lower than it is
      today. Look at what happened to the P/E during Mexico's
      problems in 1995. The shares recovered, but that doesn't
      mean that the people who were too impatient made money
      on call options.

      I'm waiting for $12-13
      before I'll buy; it might not get there, and then I
      haven't lost anything. But you should give yourself a
      little added protection when catching a falling knife.

      P.S. There is a lot of talk on this board about Coke's
      P/E multiple relative to PB's. Consider this: PB is
      at about 12x (or more) FY99 earnings; Brazil's two
      leading meat processers are at 4x FY99 EPS. That gives PB
      a relative P/E of 3 to its Brazilian peers; about
      the same as KO relative to U.S. peers. Does that make
      it cheap?

    • DITTO

    • One man's opinion on the talk about PB being a
      good investment or not. From my perspective I'm a
      small business owner who recently bought 2000 shares @
      $30.00. Would I like to have bought the other day @
      $15.75 sure who wouldn't. However, my position is simply
      this: This is a long term play for me as a retirement
      stock. From my research this stock is the kind of stock
      you wake up to in 5 or 10 years and find tremendous
      returns. The region is projected to grow more than North
      America, the company has excellent management and is owned
      25% by Coca Cola of America. The last time I was in
      Mexico and orderd a soda I'm pretty darn sure it was
      COKE! In my humble opnion this is a long term no
      brainer. Short term? Play around with the Dells, and the
      rest of Technology Stocks but good luck! For me I'm
      sticking with PB.

    • I agree with PB_Fan - soda is one thing people
      are going to keep buying, no matter how bad things
      get in LatAm. PB has just gotten indiscrimantly
      creamed along with the rest of the LatAm market. But,
      once has to think, that once the fear factor subsides
      a little, PB's steady earnings and solid management
      will attract interest ahead of other companies, and
      we'll see a rebound. Now, how long it will take to get
      to 40 again is a good question...

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