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
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