Reuters
Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
Brazil-based Banco Bradesco SA offers a range of banking and financial products and services, including deposit taking, individual and corporate banking services, credit operations, mortgage loans, credit and debit cards, leasing operations, investment banking, international banking, securities brokerage, portfolio management, consortium services, various types of insurance, management of complementary private pension plans and savings bonds, among others. It has a market cap of $51-billion (U.S.).
Shares have struggled over the past year amid Brazil's economic weakness and the Petrobras corruption scandal, but its fundamentals remain strong.
It has increased EPS in all but one year of the past decade, which the Warren Buffett model likes.
It has $3.47 in cash flow per share vs. the market mean of $1.71, helping it earn strong interest from the James O'Shaughnessy value approach. The O'Shaughnessy value approach also likes its size ($33-billion in ttm sales) and 3.8-per-cent dividend. The company trades for just 8.7 times TTM EPS.
The Peter Lynch-based model likes its 0.64 yield-adjusted PEG ratio, and the company gets strong interest from the John Neff-based strategy, which likes that its P/E is between 40 per cent and 60 per cent of the market average. The Neff strategy also likes its 1.56 total return/PE ratio (EPS growth + dividend yield, divided by P/E ratio), which far exceeds the market average of 0.56.
Banco Bradesco also gets strong interest from the David Dreman-based contrarian model, which likes that its P/E and price/cash flow ratios are both in the market's cheapest 20 per cent. The Dreman model also likes its 3.8-per-cent dividend yield and 21-per-cent pre-tax margins.
John Reese is long BBD.
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