Shares of Peru's largest bank, Credicorp (BAP)
have spent the last six months basically just hanging around, with the
shares wobbling between $125 and $140. Investors have been mulling over
changes in Peru's economy, the de-dollarization of the banking sector,
loan growth and default trends, as well as company-specific issues like
recent disappointments in earnings and the promising acquisition of
Mibanco.
I hope it goes almost without saying that investing in a
Peruvian bank carries certain risks above and beyond your typical
investment, though clearly investing in banks like Citigroup (C)
and so on is hardly risk-free. This looks like a well-run bank, though,
and a company that is structured to benefit from both the growth of the
Peruvian economy and the maturation of the Peruvian financial sector.
Shares appear undervalued on both an ROE and book value basis, with
upside to $160 on relatively conservative assumptions.
Please follow this link for more:
Even After A Little Rally, Credicorp Could Have More Headroom
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