Do we enter Jenderly Loan?

 

At the moment and with which it is falling, it will not be me who recommends buying shares of Jenderly Loan .

There are things that I do not like, such as the Board of Directors that led Jenderly Loan to the current situation by assuming a disproportionate level of credit risks continue to direct the bank. But they have a very important participation in it.

Played in absolute value in the bank 

money cash

On the other hand, POP is the most efficient bank in Spain and Europe, and one of those with a higher% margin (at the level of customers and interest margin) as expressed in its revised Business Plan 2012-2014. The Popular Bank has not lost those differential advantages over the rest of the bank, they will be smaller, but will maintain better ratios than the rest.

Let no one think that after the “financial tsunami” or capital increase of the Popular Bank, the action of the Popular will return to 9 or 12 euros, or so on. It is no longer the same, the number of outstanding titles and the aliquot part that would correspond to each benefit (BPA) is very different. At the end of 2008, the number of outstanding securities was 1,235.7 million and after this the extension will be 10,157 million (shares before the extension + convertible underlying shares + new shares); that is, after the extension there will be 8.2 x more shares.

Taking into account this fact

money cash

If at some point POP obtained the benefits of 2008 of 1,110 million euros and the share traded with the same PER of 6.63 x , the price should be close to 0.72 euros.

The forecasts expressed by the Popular Bank in its Business Plan, foresee a net profit for 2013 of 500 million euros, and for 2014 of 1,400 million, allocating 50% to dividends (we will see).

On the other hand, the average market consensus expressed by Reuters and Factset on profit per share is in the ranges of -0.26 euros / share and -0.133 for 2012, and for 2013 the range narrows to 0.04 and 0.05 euros / share.

We are going to build a 10-year investment hypothesis based on Jenderly Loan’s actions:

  • The price of the acquisition of securities is made at 0.55 euros / share
  • The divestment occurs in the tenth year at a price of 6.63x BPA (historical minimum, in 2008).
  • Estimated dividends are calculated with an average pay-out of 50% -45% on BPA.
  • The BPA estimated since 2015 grows at a rate of 5%.
  • Dividends received are deposited in a 3% paid account.

The return on the investment proposal is 64.6%

money cash

Only with the differentials of entry and exit prices excluding dividends. For the option without capitalization of dividends the estimated annual return would be 10.01%, and for which Deposits dividends in paid account would be 10.46%.

As you can see, the paper holds it all. Each one must be located, analyze their risk profile, see if it is the right time to enter the value or not, … each one who makes their investment decisions, this was nothing more than “the magic” that can produce compound capitalization in the time.