Bear Of The Day: Banco De Chile (BCH)


If you think things have been rough stateside, you should take a look and see what’s going on overseas. Not only are we getting some big time risk-off action in equity markets but globally you’re seeing a push towards risk-off currencies like the US dollar and the Japanese yen. If you happen to be investing in emerging markets you’re now getting the double-edged sword of a stock market selloff compounded by the currency losing value against the dollar. All in all, it’s made for a terrible start to 2016.

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One area of the market you probably want to avoid also is foreign banks. It’s no wonder this industry ranks in the Bottom 31% of our Zacks Industry Rank. Part of the reason for the industry weakness is stocks like today’s Bear of the Day Zacks Rank #5 (Strong Sell) Banco de Chile (BCH). Banco de Chile provides traditional banking products and specialized financial services to large corporations, micro, small, and medium sized companies, and individuals in Chile. The company offers various deposit products, including current accounts, demand deposits, savings accounts, and time deposits. Its loan products portfolio comprises installment, residential mortgage, and non-residential mortgage loans; short- and long-term financing, working capital loans, project financing, long-term syndicated loans, and factoring loans; leasing contracts; foreign trade loans; credit and debit cards; and lines of credit and other loans.

A big reason for the Zacks Rank is two analysts dropping their earnings estimates for the current year and next year. The bearish outlook has taken our Zacks Consensus down from $5.49 to $5.14 for the current year and saw next year’s number slashed from $5.71 to $5.01. Banco de Chile also has a Value Style Score of “F” as well as a Momentum Style Score of “D.”

Investors looking to possibly scoop up some shares on the cheap should look at some other ideas on the same industry. Groupo Galic (GGAL) is a Zacks Rank #1 (Strong Buy) while Banco Macro (BMA) is a Zacks Rank #2 (Buy).

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