The National Bank Of Greece: A Risk Worth Taking
seekingalpha.com/article/...bank-of-greece-a-risk-worth-taking
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Summary
The stock is at an attractive point due to promising financials and a price which reflects strong market under-optimism.
The upcoming elections is a strong downside risk; however, facing against more probable upside pressure it the stock appears bullish.
Algorithmic analysis forecasts NGB as the strongest bank growth stock in 2015; however, the risk might be too much for investors to bear.
Generally at I Know First, we don't write about stocks which have such a high downside risk; however, our signal for NGB is just too strong to ignore. The National Bank of Greece (NYSEMKT:NGB) stands as the largest bank in Greece in terms of assets, and third largest in terms of market capitalization. The financial crisis has driven the stock price below the floor. After trading at over $650 a share, the stock is now trading at $1.71. The bank stock has been in a free fall since 2008. I believe the stock currently has a very strong upside potential, and for high risk investors is an attractive stock for 2015. There are multiple reasons for this.
1.Greece is recovering; maybe slowly and among much turmoil, but it is happening. 2Q14 GDP growth of 0.4% was the first time the nation experienced growth since 1Q10. However, unlike 2010 it was not a 1 quarter fluke, and 3Q14 had a GDP growth of 1.9%. If 4Q breaks the 3% EU target, Greece could potentially come back on the map. Athens Composite Share Price Index GD currently sits on 789 after losing 36% of its value this year.
2.Already on the floor, bank stocks, which should theoretically follow the economic outlook, sharply plunged, even though GDP had projected growth. With a rough 56% drop for NBG, the stock was simply oversold. The entire financial sector lost over 70% in that time period. Other large banks in Greece incurred similar losses: Piraeus (OTCPK:BPIRY) down 54%, Alpha (OTCPK:ALBKY) down 50%, and Eurobank (OTCPK:EGFEY) down 59%. With more solid financials than other banks the bank was hit hard.
3.The stock lost another 9.24% on Monday (5th of January, 2015) following the German Chancellor's and German Finance Minister's announcement that the departure of Greece would be "manageable". The report claimed that this would be inevitable if SYRIZA (Greek political party) leader Alexis Tsipras gets elected. This has pushed the stock even further down; it has now stabilized around $1.66. Just as tech companies enjoy stock prices well above their revenues due to investors' over-optimism, the National Bank of Greece suffers due to under-optimism.
gruß weltumradler, der gegen den strom schwimmende und olymp besteigende.....