Four Foreign Financials with Fantastic Fundamentals

Jacob Harper |

While the majority of companies trading on NASDAQ or the NYSE are based in America, a sizable portion of them are located outside the States. As of press time, about 841... give or take a couple.

Due to a lack of Stateside name recognition, a lot of quality internationally-based plays often get overlooked by American investors. But fundamentals are fundamentals, so we thought it might be interesting to look for companies that are built on solid foundations, yet might not get the same attention as their domestic peers.

METHODOLOGY

For this we decided to limit our search to plays in the Financial sector, and only include companies outside the US.

We looked for international financial plays that had the following attributes:

1) The company has a P/C and P/B greater than 1

It is important for finance companies to have strong book value and cash in addition to validation of these assets by the market. As a result, a P/C (profit to cash ratio) or P/B (price to book ratio) of 1 should be a minimum “floor” for investing.  

2) The bank has an operating margin greater than 25% percent

Operating margin shows how efficiently a company is operating is business after a good is sold.  The operating margin is more appropriate for banks because the costs associated with operating are much more significant for a bank than the cogs. 

3) The bank has an ROI greater than 20 percent 

Return on Investment, or ROI, shows how well a company is using its invested capital.  Since banks are essentially made up of all invested capital, this is a very important statistic.

RESULTS

We found four companies that fit the bill. They are:

BBVA Banco Frances S.A. (BFR)

Market Cap: $1.28 billion

Price: $7.17

P/E:7.03

Country: Argentina

RenaissanceRe Holdings (RNR)

Market Cap: $4.17 billion

Price: $96.20

P/E: 6.44

Country: Bermuda

Greenlight Capital Re. Ltd.   (GLRE)

Market Cap: $1.17 billion

Price: $31.83

P/E: 5.30

Country: Cayman Islands

Alto Palermo S.A. (APSA)

Market Cap: $527 million

Price: $17.30

P/E: 13.21

Country: Argentina

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
APSA APSA n/a n/a n/a 0
GLRE Greenlight Reinsurance Ltd. 21.90 -0.60 -2.67 118,230
RNR RenaissanceRe Holdings Ltd. 130.60 -0.04 -0.03 230,033
BFR BBVA Banco Frances S.A. 17.29 -0.56 -3.14 104,121
DMCLF Decmil Group Ltd. n/a n/a n/a 0

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