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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 provides marketing and data services to Validea.ca and receives compensation. Try it.
Banco Macro SA (BMA-N) is a bank offering traditional products and services to companies, including those operating in regional economies, as well as to individuals. It offers savings and chequing accounts, credit and debit cards, consumer finance loans (including personal loans), mortgages, car loans, overdrafts, credit-related services, home and car insurance coverage, tax collection, utility payments, ATMs and money transfers. It also offers Plan Sueldo payroll services, lending, corporate credit cards, mortgage finance, transaction processing and foreign exchange. It provides transaction services for corporate customers, such as cash management, customer collections, payments to suppliers, payroll administration, foreign exchange transactions, foreign trade services, corporate credit cards and information services, such as its Datanet and Interpymes services.
The stock has appreciated notably in recent weeks, rising nearly 32% since late May.
It ranks highly among several guru stock screens, including the Peter Lynch model, which likes the issue's P/E-to-growth ratio of 0.29. It also passes the Lynch model's equity/assets ratio. At 15 per cent, the ratio is very healthy and above the minimum 5 per cent this methodology looks for.
BMA passes the Warren Buffett-based model that looks for consistently higher-than-average return on equity. BMA's average ROE over the last ten years is 23.9 per cent, well above the model's threshold of 15 per cent.
Martin Zweig's methodology likes BMA's P/E ratio, based on trailing 12-month earnings, of 13.1. It also passes Zweig's current-quarter earnings test, as BMA's current EPS is positive ($1.61).
The bank's 12-month relative strength of 93 impresses the Motley Fool-based strategy, which also likes that the stock's profit margin of 28.15 per cent is well above the minimum trailing 12-month after-tax profit margin requirement of 7 per cent.
Investors should note that BMA is subject to volatility, as the bank is based in Argentina, which carries political and economic risk.
John Reese is long BMA.
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