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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (12590)10/25/2001 3:13:26 PM
From: Paul Senior  Read Replies (1) of 78708
 
I'll try again with BLX. They primarily make short term loans to Latin America companies/banks to finance trade. (primarily exports to USA)

finance.yahoo.com

Negatives are:

Potential disruptions/decline in trade due to increased security measures/recession.

Potenitial - if not probable - default by Argentina on huge loans. IMF may not bail them out this time. Many Argentinian banks are stockholders in BLX. They might have to sell their shares. I'll guess that even if BLX business is safe, news will headline Argentina default (if it happens), and this could further lower the price of any US-listed Latin American stock related in any way to Argentina (or Brazil)

Stock has traded lower - cratered, imo - when investors have lost confidence in prior foreign trade crisis (i.e Asia in '98).

Competitor is having accounting issues and may be overextended or may not have properly assessed its credit risks. Perhaps an issue for investors with BLX too - of not knowing much about BLX loans or customers.

Not that much revenue growth.

Positives:

Good history of fairly steady 14% on ROE. Stock price below book value. Stock price has come down from highs of this year. Company reports very difficult/challenging business environment now, but stock still at a good p/e (I assume earnings will not crater), and good dividend yield. Their loans - from what I guess - are mostly short term in nature. Latin American countries will still want to export to USA.

Steadily rising dividends; common stock buyback in place.
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I am starting a small bet today within a well-diversified portfolio.

Paul Senior
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