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Spanish money center bank and the largest bank in the euro zone by market value, with major operations in UK, Latin America, Portugal, Germany, Italy.
P/E = 10.8; PEG = 1.0. At $20.98 the stock is undervalued. Value is $23.48 using 2007 EPS consensus of $1.94 in a discounted cash flow valuation using a 10% increase in earnings each of next 3 years, 3% reversion growth and a 12% discount rate (high given financial sector uncertainty). Dividend yield is 3.4%, paid quarterly. Above left, a chart of STD last three months. Recently, Santander profited substantially from the sale of Banca Antonveneta, which it acquired from ABN Amro. It kept the Brazilian operations of ABN. This information is not meant as investment advice; it is the opinion of the author, and readers should conduct their own research before buying any stock.
Spanish equities, including banks, have been performing well despite the US market downturn. Consider:
Continue reading "Analysis Brief: STD - Banco Santander SA" »
The market has been on a bit of a wild ride lately. Take Tuesday November 20th, for example. In the early morning the Dow moved up 150 points, then by mid-day it reversed and headed down 250 points, finally ending the session at +50 for the day. What's behind all the volatility? Well at least part of the cause is the elimination of the Uptick Rule. The July 6 removal of the "restrictive" Uptick Rule has made it easier for short sellers to execute trades. But is this a good thing? Take a look at a chart of the Dow last Tuesday (above, left). The Uptick Rule was implemented in the 1930's after the crash of '29 , to prevent short sellers from putting further downward pressure on a stock when the price is falling.
Japanese investors are "quitting America": International Herald Tribune
Denmark to vote again on joining euro: International Herald Tribune
New record, dollar at $1.4966 per euro: Financial Times
CEO to sell $86 million CD in RIMM shares: Globe and Mail
BNS to buy Peru's Banco del Trabajo: Globe and Mail
More uncertainty at Northern Rock: Guardian
Easyjet is a European discount airline (EJETF.PK). Its shares debuted in the US in 2005 under $5.00 and now trade at $11.70, a compound rate of appreciation of 38% per year. After a somewhat flat beginning of the year, the airline posted record results for the year ended September 30. Pre-tax profits rose 56% to £202 million and revenues increased 11% to almost £1.8 billion. Passenger volume rose 1% to 37.2 million. Easyjet is the fourth largest airline in Europe and is growing rapidly. Its chief competitor is Ryanair (RYAAY). Earnings were reported as $0.35 per share; P/E = 34, PEG = 0.61.
Warning sign: Credit crisis engulfs Korea and China : Telegraph
Bank of England hints at rate cut: Telegraph
Opinion: China should help the dollar:Telegraph
Home price growth slows to 6.4% in France: Les Echos
Asia's Warren Buffett: "Time to buy stocks.": The Standard
Over the past year, REIT prices and multiples have come down considerably. Many stocks are now paying very attractive yields based on their current valuations: ProLogis (PLD) at 2.7%, Simon Property Group (SPG) at 3.5%, Macerich (MAC) at 4.0%, and SL Green Realty (SLG) at 2.5%. But will prices go even lower, giving buyers a better entry point? There are two places to look for the answer to this question: commercial building vacancy rates and capitalization (cap) rates. Cap Rates are used in commercial real estate to value properties - the net operating income from a commercial building is divided by the cap rate to determine a value, so the lower the rate the higher the value. Cap rates are the inverse of the P/E ratio used in valuing stocks, except they are applied the net income before taxes. (Chart, above left of Simon Property Group over the last year).
The catalog says: " Some 100 exhibits will document influential design and applied art of the 20th cent
ury, with a critical focus on the floral theme." i.e., "Flower Power." Increasingly, the 1960's and 1970's have arrived in the conscience of the art world. Quittenbaum will hold a lecture about the "Flower Power" designs of that time with a corresponding auction on November 19. In addition to the lots that will be auctioned, there will be an exh
ibit. For those of us that lived through the period of Nehru jackets, bell bottoms and love beads, it doesn't quite seem like "history" yet. On the left, Verner Panton, Four Lamps, 1968, estimate € 5.000. On the right, Gruppo 14, 'Fiocco' Chair, 1970, estimate € 5.000. More highlights and memories after the jump and at the Quittenbaum site.
Again, yes, if has been created by the "right" artist. Consider the returns to the holders of the following works of art. At left is Andy Warhol's portrait of Liz Taylor, bought for $3.6m in 2001 and sold by Christie's for $21m in 2007. The annual compound rate of appreciation over this period of time was 34.2%.
On the left is Jeff Koons' sculpture Blue Diamond - you can see the scale of this piece by comparing it to the people on the right. It was bought two years ago for $3.5 million and just sold at Christies for $10.5 million. This indicates an annual compound rate of appreciation of 73.2%. Blue Diamond was bought by the dealer that had sold it originally. No doubt, he thinks the price has further to run.
These returns have bested almost any offered by Wall Street hedge funds, and are just below those of Chinese equities over the last few years. This begs the question: why aren't funds investing in art?
