Best Bank You've Never Heard Of: Credicorp (BAP)
While we try to guess how our banks are going to do when results of the stress tests are released next week, there is an undiscovered (and potentially less risky) gem of a bank in Peru: Credicorp Ltd. (BAP).
The bank has been a steady performer over the last 5 years and still is performing well in the current environment over the last 6 months. In Peru, it's based in one of the most stable market economies in Latin America.
BAP's return on equity is over 21% with cash on hand greater than its debt ($4B). Its forward PE is only 8. Its revenues have dropped in the last quarter, as it's unquestionably tied to the commodity trade in South America. As the price of copper took a hit in the last 10 months, BAP traded down in sympathy.
If you believe that commodities are going to continue to appreciate over this year and into next, another way to play that is through BAP. Its credible management team has a solid 5 year track record to show for themselves (up 300% over that time).
Position: None.
Originally published in RealMoney.com on 4/30/2009 1:33 PM EDT
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