One Foreign Banking Stock To Play On The Brazilian Rebound
In an email sent to investors on Friday, Ronnie Moas, founder and director of research at Standpoint Research, shared some comments regarding Bancolombia SA (ADR) (NYSE: CIB).
The expert had exited his position in 2011 at $65.00. However, he is now reinstating the name with a $48.00 price target for 2017–2018, implying an upside of more than 30 percent. In addition, the analyst upgraded the stock’s rating from Hold to Buy, seeking to better reflect the upside potential and a 3.3 percent dividend yield.
Although Moas promised to release a long report on Bancolombia in two weeks, he briefly explained why the stock should be reinstated. “An over-reaction to the oil price collapse, lower Colombian peso [a fall of more than 50 percent], problems in Brazil [corruption scandals, inflation, higher interest rates, falling commodities prices, reduced GDP outlook…] and other headlines has dropped Bancolombia by 45 percent in the last twelve months,” he expounded. So, with the stock now trading at 1.3 times the company’s book value and 1.5 times its tangible book value, an attractive entry point appears available.
In addition to Moas, several major institutional investors are betting on Bancolombia. For instance, Northern Cross last disclosed having increased its exposure to the company by 24 percent over the second quarter of the year to 12,950,106 shares worth almost half a billion dollars.
Among hedge funds, Thomas E. Claugus’ GMT Capital boosted its stake in the company by 27 percent over the second quarter, last disclosing ownership of 325,900 shares.
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Latest Ratings for CIB
|Dec 2016||Morgan Stanley||Upgrades||Equal-Weight||Overweight|
|Oct 2016||Credit Suisse||Downgrades||Outperform||Neutral|
|Aug 2016||Deutsche Bank||Upgrades||Hold||Buy|
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