Quarter By Quarter, Outperformance Is Building Société Générale's Credibility

 

After more than a lost decade, Société Générale (OTCPK:SCGLY) ("SocGen") is really starting to deliver on a self-improvement and build (or perhaps "rebuild") credibility with investors. There are still a lot of issues left to tackle, including low intrinsic profitability, but management has key businesses like French Retail on a better path and a plan in place for operations like the global trading and flow lending operations that have been long-term laggards. Along the way, management has shown that it's willing to be opportunistic - negotiating with ING (ING) on their French retail operations and purchasing LeasePlan through its ALD subsidiary.

Low expectations are still an asset when it comes to evaluating SocGen's investment prospects. Low single-digit core earnings growth can still support a healthy return from these shares, even after a 27% move since my last update (outperforming European peers by about 10%). SocGen's market share prospects in French Retail and ability to really turn around the trading and advisory operations are valid concerns, but I'd say the risk/reward balance still favors SocGen shares at these levels.

Read the full article here: 

 Quarter By Quarter, Outperformance Is Building Société Générale's Credibility