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Santiago B.
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My name is Santiago Benito, I'm an independent investor currently residing in Spain. I have a university degree focused on Information Systems and Software Engineering. I've invested on stock markets for ten years, mainly trading, scalping and money management. My preferred portfolio management... More
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  • Spanish Banking Sector. Real Growth?

    After some sport goals, sometimes extreme (www.lalegion101.es/) now I have enough spare time for writing again.

    Last week my radar started to send signals in the Spanish banking sector direction. Medium banks are now being seeing as important targets for mutual funds that search for investments with more than 10% of profitability. One indicator that allow to discriminate better what has value in the ratio or Return of Equity, well know as ROE. This indicator calculate the amount of net income returned as a percentage of shareholders equity, ergo, return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

    The higher the ROE, the more profitable on a bank and, presumably, it will more valued the investment community. Applying this to the banking sector in Spain, I've analyzed two medium Spanish Banks with an interesting ROE: Bankia (ROE'13 = 4,7%) and Liberbank (ROE'13=8,57%)

    Bankia, yesterday recovered the threshold of 1,5 ee per share, the price, probably was boosted by the new objective gave by JPMorgan analysts that offer a profitability of 6,6%, with the 1,6 ee the target although the government must sell tomorrow another package of share to fulfill with the promise made to the UE, and this time the discount must be bigger than 90 days ago, after the sell, we expect a big revaluation of the titles probably next week.

    In image below we can observe that bollinger band are shaking suggesting the price must jump to next level. MACD and RSI are bullish and the increase of big buys (koncorde indicator) are positive.

    (click to enlarge)Daily evolution

    In weekly chart (without noises) the trend shown clearly the strength of the movement:

    (click to enlarge)

    In this second graph, KDJ indicator show a very positive signal of growth for next weeks.

    My second option, Liberbank, is a new bank that was born after the adjust of the sector. In this moment the bank is facing a capital increase so the price had just experiment the effect of divide the share and the right. Today, the daily volume has been multiplied by 4, so the interest to become a part of this entity is evident.

    Graphs below show how investors are taking positions in the pole. Current equity holders have expressed interest in going to see enlargement to avoid dilution in the bank.

    (click to enlarge)

    In weekly view:

    (click to enlarge)

    To summarize, Spanish bank sector is experimenting the revaluation of the economy better than traditional blue chip banks that are adapting slowly to the new environment. The ROE (Return of equity) is the clue that allow to detect which firms are going play better in this game.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: Banks
    May 29 11:38 AM | Link | 2 Comments
  • The Spanish Risk And Bankia Shares.

    The triumph of Angela Merkel in German elections this Sunday gives wings to the financial policy for being continued. The reforms that Spain started to implement at the beginning of the financial crisis with the pressure of the German government are showing us now how the differential rates that Spain government needs in his financing are decreasing. Parallel nationalized banking it's having a good behavior, example of this are Bankia shares. The risk of problems in this bank tends to be minimal because of the restructuring of his balance sheet with the buying of SAREB, the Spanish official society for the management of real estate assets from bank restructuring, (the "bad" bank in colloquial terms),

    In graphs below you can observe both elements (Country risk VS Bankia shares):

    (click to enlarge)

    From a technical view, indicators in daily chart show how the price has potential to increase while the country risk continue going down.

    RSI: is positive and doesn't show overselling. There is too many route.

    MACD: bulls are not dominants, but neither the bears: positive! (in weekly is better)

    TRIX: Positive and continue

    KDJ: It is neutral, so with good news, that's fine

    In the weekly chart we continue far from the upper limit of the Bollinger bands, and technical indicators promise us a continuity in trends.

    I bet when market assimilates news, the price continue increasing.

    Disclosure: I am long OTCPK:BNKXF.

    Sep 23 9:56 AM | Link | 2 Comments
  • OREX Is Waking Up

    From a dark place of my volunteer ostracism (after the big crunch of CLSN), I can see OREX breaking a triangle in the weekly graph. Last year, in July, OREX climbed to 2012 maximums, and perhaps now it is doing the same. I hope we're seeing a new beginning. After all, this is the only of the three big fat-burners that doesn't obtain the OK from FDA.

    (click to enlarge)

    Have a good weekend!

    Disclosure: I am long OREX.

    Tags: OREX
    Jul 26 9:47 AM | Link | Comment!
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