Monday, May 11, 2015

Seeking Alpha: Out Of Recovery, Popular Needs A Healthier Home Market

Popular (NASDAQ:BPOP), the market-leading bank in Puerto Rico, has done a lot of good things to clean up its operations since the banking meltdown. The shares haven't really outpaced the sector over the last year, though, and I believe that has a lot to do with the ongoing struggles of the Puerto Rican economy.

I believe management's acquisition of assets from the wreckage of Doral (DRLCQ) was a relatively good move, but the company is likely still looking at tepid loan growth and comparatively high credit risk in the short-term. Higher rates would help (as it would for many other banks), but a better economy in Puerto Rico would help even more. I'm not bearish on Popular, but the shares only look about 10% or undervalued to me today and that's not quite enough to get me interested in adding them to my portfolio.

Read the full article here:
Out Of Recovery, Popular Needs A Healthier Home Market

No comments: