Banco Latinoamericano (BLX), which has its headquarters in Panama, has delivered its investors a total average return of 33% per year over the last 10 years. What were Bank of America and Citigroup doing during that time period?
Over the last five years, this bank stock has delivered 10.5% of alpha per year to its happy investors. Over the last three years, investors have received an average of nine points of alpha over the S&P 500.
Check out the last 12 months! The stock is up 53%, while the S&P 500 is up 25.2%. Now those are some serious performance numbers.
Anyone been to their shareholder meetings? I know it's a long drive, but I'll bet it is a lot happier crowd than that Citigroup crowd.I also like the fact that the bank has branches in Argentina, Mexico, Brazil, Peru, and the United States. Mexico is the third-best-performing market in the world so far this year, with a 21.6% gain. Peru is number four with a 15.5% gain and the United States is number five with a 14.6% gain. Now if the bank could just open a branch in Thailand and India. They are up 26.2% and 25.9%, respectively, so far this year. I doubt there are many Spanish speakers there, however. What about value, however? I have found that buying stocks just on their performance numbers is a very dangerous game. Buyers of red-hot tech stocks back in the year 2000 found out the hard way that valuation does matter. Buyers camping out in order to buy a single family home in 2006 learned the same lesson-the hard way! With that in mind, let's take a look at the current valuation of Banco Latinoamericano: Data from Best Stocks Now App This small-cap bank stock is trading at just 7.97X forward earnings. By contrast the aforementioned Bank of America is trading at 9.70X forward earnings. Banco Latinoamericano is also expected to grow at a pretty good clip over the next five years. I have a five-year price target of $38. The stock is currently trading at $22.50. Did I mention that the stock also offers a current dividend yield of 4.5%? Out of the 3,035 stocks that I follow and rank on a daily basis with my Best Stocks Now App, Banco Latinoamericano comes in at number 96. It is also my highest-rated bank stock: Data from Best Stocks Now App BLX is also one of the stocks in my Income and Growth Model Portfolio that is published every week in my newsletter. To get four free weeks of my newsletter, click here. Follow @billgunderson At the time of publication the author had no position in Banco Latinoamerica stock although most of his income-seeking clients at Gunderson Capital Mgt. are long in the stock. This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV