If you read the foreign research, such as, Caja Madrid Bolsa, Banco Sabadell, Mediobanca, or Hamburger Sparkasse, they would have you believe that STD has no more need for capital raising. But, here is Barclays, this morning, suggesting the bank needs to raise 14 billion euros to get to 8% tier one, the European bank average. To close the gap for Basel 3, to get from 7.1% to 9%, they would need 14 to 18 billion euro of additional capital. The capital raise would reduce earnings by over 10% for 2013. Someone is correct and someone isn't, but the reason the stock is at $11.46, and probably not going anywhere in the near future.
that's true. where do you stand on the likelihood of a default in the euro-zone? My personal belief is that it is unlikely, given the apparent willingness of officials to prevent such a situation from occurring. I happen to think this is simply a conveniently-timed pullback from overbought conditions, and represents a buying opportunity once the appropriate levels are reached.
If you buy a bank stock, I do not think you can make a good case for any bank stock with a real stress test, or worst-case scenario. Banks are highly leveraged companies, meaning under a real worse case scenario, none of them can really survive.
in the near term, the problem is none of that stuff matters. all stocks are rising and falling together, and those with even remote association with Europe are going down twice as hard. Over time, fundamentals will win out, so the real question is...what is the potential damage to STD in a worst-case scenario? Then, what is the likelihood that a worst-case scenario actually plays out? Currently thinking these two questions over.
My opinion is that WFC is a wonderful company at a bad country, while STD is just a so-so company at some good countries.
Yes, STD has time to generate earnings to comply with basel 3, but every dollar of earnings that go for higher capital ratio is a dollar less working for the shareholders. With a conservative valuation, STD is a good buy. Don't be fooled by the rapid growth hype in emerging market or some stupid metrics like majority of income comes from Brazil, tho.
STD has smart management. They bought into Brazil prior to the economic crisis (instead of buying into Europe, as RBS did). They recently bought into Poland and Mexico, which are "underbanked" regions. They will continue to grow their earnings during periods of economic weakness. As for Basel III, this won't be fully implemented until 2018 (I believe), so STD will have plenty of time to generate earnings internally to get into compliance with the higher capital ratios by then. Same scenario was with WFC in the US (which just reported is most profitable quarter in history). I am (obviously) long both WFC and STD.
I am bashing STD? LOL. I am just giving out objective facts. to contribute to a discussion board which I have gain valuable information from. This hopefully can benefit people who want to look at unbiased views of companies.
I do not short stocks. You are like many others who simply claim anyone saying negative things as short sellers...pretty naive.
What scenarios I am fabricating??
and...anyone who buy 1 share of STD can be an investor, wow, big deal...
and...STD revolutionized banking though innovation and attention to both small and large investors...this is very interesting, i thought a successful bank should focus on customers, not investors. Well, you always have some strange metrics to evaluate a stock.
The website you are referring to is fom a sefl proclaimed expert having 2 years of experiece investing...
I think you are shorting STD, and you are fabricating scenarios to confuse investors about STD?
Just for your own information, I know first hand Banco de Santander, as acustomer and investor. I have money invested here, like my father and my grandfather did, and now over 3 million investors.
You have no idea of STD.
They revolutionazed banking through innovation and attention to both small and large investor.
Valuation? $18 in 3-6 months.
Mark my post.