# A little taste of Spain - SAN



## thompsg4416 (Aug 18, 2010)

I thought I started this one a while back. I think its taken a beating just for the fact its spanish even though only a small part of thier opertations are based there. The company has a solid balance sheet and has a PE Of 8, a huge dividend of nearly 11%.... Classic value play?

I'm a huge holder of this stock and I've made some money on it since I got in about 6 months ago. Originally in at 8 avg'd down to 6 and sold off 2000 shares at 8bucks. I'm back in again at 7.50.

3rd quarter results are coming out.... I'm hoping for some good results!

Anyone else holding this one or have some opinions on it?


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## underemployedactor (Oct 22, 2011)

You mean Banco Santander right? I get a P/E of closer to 16, though I'm not sure how meaningful the P/E is with this kind of play. I've watched it for a while as I like the South American exposure though that seems to be stumbling. If I play this at all (which I might be too chicken to) it would be as a swing trade for which it looks pretty juicy. So I'd say more of a casino play than a value play. the inmates seem to be running this nuthouse. The day you posted their 3rd quarter earnings fell 94%. They had previously announced plans to buy a bunch of Bank of Sxotland, then didnt. It's still not clear to me what their bad loan ratio in Europe is. I would stay away as a buy and hold, but you could have lots of fun jumping in and out of this cesspool.


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## thompsg4416 (Aug 18, 2010)

underemployedactor said:


> You mean Banco Santander right? I get a P/E of closer to 16.


Yeah I have 14....according to Nasdaq. Google finance p/e is off.

It's a risky play no doubt and their 3rd quarter results were not great mainly due bad real estate. I still like the div and think they'll turn it around long term. That said I've been in and out of this one a few times as well with an aim to be in long term. As you said they have some nice Global exposure mainly in S.A.


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## indexxx (Oct 31, 2011)

thompsg4416 said:


> Yeah I have 14....according to Nasdaq. Google finance p/e is off.
> 
> It's a risky play no doubt and their 3rd quarter results were not great mainly due bad real estate. I still like the div and think they'll turn it around long term. That said I've been in and out of this one a few times as well with an aim to be in long term. As you said they have some nice Global exposure mainly in S.A.


I have a small position opened around $7


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## thompsg4416 (Aug 18, 2010)

Another risky high reward banking play is Bank of Ireland....There was even an article about the bank of ireland in the globe just recently although the final recomendation was to not buy now.


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## underemployedactor (Oct 22, 2011)

Looks like resistance at around 6.90 for whatever that's worth. I might start to nibble at around those levels. Thom - by back in at 7.50, did you mean you already bought in, or that was your preferred entry point?


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## thompsg4416 (Aug 18, 2010)

underemployedactor said:


> Looks like resistance at around 6.90 for whatever that's worth. I might start to nibble at around those levels. Thom - by back in at 7.50, did you mean you already bought in, or that was your preferred entry point?


I bought back in at 7.50(higher then I should have)... sold a quarter of that off at 7.80 again and still have some at 7.50. I'll be looking to sell a bit more of my position but I'm long. If it dips below 7 I'll be loading up again.


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## thompsg4416 (Aug 18, 2010)

Still with this one(made a good chunk) but the PE(19) and forward PE(16) is starting to look a bit scary - well above industry standards. Yet yesterday there it was up another 2.6%. Anyone else have SAN in their portfolio? At these levels I'm wondering if I should sell my position. Is there something I'm missing? Appreciate any feedback.


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## indexxx (Oct 31, 2011)

I just sold mine out this week- I got in around $7 and just felt that this time I would book the 40% or so and be happy- ('bulls and bears get fed, pigs get slaughtered- not wanting to be a slaughtered pig! ). Great dividend too! I personally would jump back in on a 20% pullback. I've decided that going forward, for almost all of my stocks, if I'm up 10-12% then they are candidates for selling so I can use the profits for another low purchase. The exception for me would be something like Yelp, where I got in near the 52-week low a short while back, and it's up significantly now, but I believe it still has room to run.


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## thompsg4416 (Aug 18, 2010)

I'm leaning toward halving my position. I have a certain affection for this stock - I got in on it when it was all the way down to 5 bucks during the euro crisis - sold at 8.80. Got in again when it was at 9 and doubled up at 9.80. I've rode it up over 10 in the last month or so. I'm thinking of keeping my original position (@9 bucks) as a long term holding. 

The div is great if you drip it. If you take the cash you get the 21% withholding tax which burns a bit.


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## PuckiTwo (Oct 26, 2011)

thompsg4416 said:


> If you take the cash you get the 21% withholding tax which burns a bit.


Can't you claim the withholding tax on your Canadian tax return? That's at least what my accountant tells me: _"whatever tax you pay around the world you can claim it on your Canadian tax return. If you hold a foreign equity in your corporate account and pay foreign tax then you can claim it on your corporate tax return and the same is true for non-registered foreign equities owned personally on your personal tax return." _

SAN now sitting at 10.60 - I watched it too long and didn't make a decision. Do you think there is still some upside to it? There was an article about Spain economy in the Economist with a quote from the Santander CEO "that the money is pouring in from all corners of the world". I would be interested in your opinion.


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## Toronto.gal (Jan 8, 2010)

PuckiTwo said:


> 1. Can't you claim the withholding tax on your Canadian tax return?
> 2. There was an article about Spain economy in the Economist with a quote from the Santander CEO "that the money is pouring in from all corners of the world".


*1.* Yes, but there are limits as article below explains well.
http://www.theglobeandmail.com/glob...-hunters-must-beware-tax-trap/article9840189/

*2.* I have been DRIPping the stock since the big price drop via the Scrip Dividend Program, and don't plan on selling nor adding at near 52 week high [other than with dividends]. In every quarterly letter we receive, the bank indicates the % of shareholders DRIPping the stock, as opposed to receiving cash dividends, and though I'm not sure I believe the numbers given the high yield, they said it was 90.64% in Q4-2013 [similar in other quarters], and that such a high % demonstrates the high confidence of shareholders. 

I personally like the bank for its wide geographic diversification [shown at bottom of pg. 5 in below link], and solid expansion strategies in big emerging markets. I see this bank as the BNS of Spain in that regard.

http://www.santander.com/csgs/Stati...me2=Content-Disposition&blobheadername3=appID


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## PuckiTwo (Oct 26, 2011)

Toronto.gal said:


> *1.*
> 1. Yes, but there are limits as article below explains well. http://www.theglobeandmail.com/glob...-hunters-must-beware-tax-trap/article9840189/
> 
> 2. *2.* I have been DRIPping the stock since the big price drop via the Scrip Dividend Program, and don't plan on selling nor adding at near 52 week high [other than with dividends]. In every quarterly letter we receive, the bank indicates the % of shareholders DRIPping the stock, as opposed to receiving cash dividends, and though I'm not sure I believe the numbers given the high yield, they said it was 90.64% in Q4-2013 [similar in other quarters], and that such a high % demonstrates the high confidence of shareholders.
> ...


1. T.Gal, thks for the links. The G&M Rob Carrick one I will fire right back at my accountant.
2. I need to look into it. We usually don't drip as we need the dividend payouts for income. However, if I bought it in an RRSP I could drip it because we will be withdrawing only in a few years.
3. Being interested in all-European this thread caught my eye from the beginning but I didn't investigate any further, only watched it. Therefore missed the Scrip Div Program. Remembering the name I was surprised to see a number of Banco Santander branches on our two months trip this spring through the southern parts of Germany, Switzerland and Austria. There were Santander branches even in medium-sized towns/cities, mainly in Germany. Quickly checked their website: in Germany alone they have almost 300 branches serving 6.5 million customers - that is no longer a small bank.

Where would you buy SAN or Teva (which was also mentioned in the Rob Carrick article and I thought I had seen you mentioning it in one of your posts)? Would you buy stocks like that on the NYSE or would you trade them on a European/Israelean exchange going through TDW Global Trading?


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## thompsg4416 (Aug 18, 2010)

PuckiTwo said:


> Would you buy stocks like that on the NYSE or would you trade them on a European/Israelean exchange going through TDW Global Trading?


Buy the ADR on the NYSE. I hold SAN in my TFSA and run the SCRIP. I did sell half of my position but I still hold quite a bit and plan to for the foreseeable future. I think the PE is a bit high at the moment. I would not be purchasing at these levels but that's just me. Like T.Gal I do like their international exposure. Check this out:


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## PuckiTwo (Oct 26, 2011)

thompsg4416 said:


> Buy the ADR on the NYSE. I hold SAN in my TFSA and run the SCRIP. I did sell half of my position but I still hold quite a bit and plan to for the foreseeable future. I think the PE is a bit high at the moment. I would not be purchasing at these levels but that's just me. Like T.Gal I do like their international exposure. Check this out:
> View attachment 970


Thks thompsg4416. I will try to get in under 10. Just looked at the great chart - I love that kind of exposure.


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## Toronto.gal (Jan 8, 2010)

PuckiTwo said:


> if I bought it in an RRSP I could drip it because we will be withdrawing only in a few years.


The Scrip Dividend Scheme was only introduced during the crisis, so it might be discontinued at some point. Also, while US withholding taxes don't apply in an RRSP, international [ADRs] taxes are not recoverable. 

And yes, I purchase international stocks via ADRs on US exchanges.


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## PuckiTwo (Oct 26, 2011)

Toronto.gal said:


> * international [ADRs] taxes are not recoverable.* And yes, I purchase international stocks via ADRs on US exchanges.


Thanks for the helpful info. So much to learn.


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## londoncalling (Sep 17, 2011)

http://www.marketwatch.com/story/ba...overnight-share-sale-2015-01-08?siteid=yhoof2

thought I would revive this thread. Anybody care to comment on recent moves by SAN. Not liking the removal of the scrip. I want exposure to foreign banks and was looking at this as an option in the past. May by BNS instead as a more stable play on international banking. different regions but possibly same intent.


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## Janus (Oct 23, 2013)

PE ratios aren't really that relevant when looking at banks, you should be using PB.

There are a ton of bargains to be had in Europe right now, particularly in france. Companies with 50% of their market cap in cash, paying a 5% dividend, trading on 8x PE with 10 years of 15%+ ROEs. You can't find that anywhere else in the world right now.


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## londoncalling (Sep 17, 2011)

Thanks for the reply. I would agree that PE is not as important a metric to bank stocks as other valuation ratios. Posting of the link was more in regards to the div cut. I tend to simplify my bank metrics to 5 or 10 yr comparisons to dividend yield, dividend payout and P/B. So many choices. Definitely seeing lots of opportunities for long term gains. Curious to see what others are looking at in this space. My only foreign(non NA bank) is Lloyd's bank. Looking at a European option with diversified exposure. SAN may be one of riskier in this area in comparison to others. 

Cheers


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