Author Topic: EGFEY - Eurobank  (Read 144728 times)

gary17

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EGFEY - Eurobank
« on: May 08, 2014, 07:34:46 PM »
I don't know much about banks but I got into this because Prem & Wilbur are at it again -
This was a state-owned bank & they did a capital raise and Prem & co got in at 0.30 euro / share or about 0.2 USD for EGFEY based on 2:1 ADR to common ratio & 1.38 exchange rate.  At 0.30 this is below book - I believe 50% of book value.  Has anyone bought this?  I have been loading the ADR as it is trading at about a 17% discount....  The shares are 0.37 euro right now on Athen's exchange... or about 0.255USD.... the way I see it is buy EGFEY at 0.20 you are paying the same price FFH is paying and there's a potential for this to converge to the Athen share prices -

Prem and Wilbur both got seats on the board so if they can replicate what they did at Bank of Ireland this should at least be a double.

Gary
« Last Edit: May 09, 2014, 10:18:08 AM by Parsad »


PJM

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Re: Eurobank - EGFEY
« Reply #1 on: May 08, 2014, 11:28:00 PM »
Hi Gary

This seems to be almost the same investment as Bank Of Ireland by Prem & WR club.

I spent some time today understanding the financials of EuroBank, and it does look interesting. The situation in Greece is definitely improving so it wont be surprising to see PPI and NIM improving as a result of lower deposit spreads and reduced 90dpd, which peaked over last few years. Not sure if 21% CLP estimates are conservative enough.

After the new capital offering (which will start trading today) i think the BV should be around 7b which translates into 0.46euro, so the stock is trading 0.8x of BV. Not a very big margin of safety imo, unlike Bank of Ireland.

Are you investing just to replicate Prem & Wilbur, or you have any other investment thesis?

 

phil_Buffett

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Re: Eurobank - EGFEY
« Reply #2 on: May 09, 2014, 01:47:33 AM »
I don't know much about banks but I got into this because Prem & Wilbur are at it again -
This was a state-owned bank & they did a capital raise and Prem & co got in at 0.30 euro / share or about 0.2 USD for EGFEY based on 2:1 ADR to common ratio & 1.38 exchange rate.  At 0.30 this is below book - I believe 50% of book value.  Has anyone bought this?  I have been loading the ADR as it is trading at about a 17% discount....  The shares are 0.37 euro right now on Athen's exchange... or about 0.255USD.... the way I see it is buy EGFEY at 0.20 you are paying the same price FFH is paying and there's a potential for this to converge to the Athen share prices -

Prem and Wilbur both got seats on the board so if they can replicate what they did at Bank of Ireland this should at least be a double.

Gary

i also bought Shares here. i believe the Situation in greece will become gradually better. so it is Long term. the same as with ireland years ago.

i buy more next month when i have cash

gary17

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Re: Eurobank - EGFEY
« Reply #3 on: May 09, 2014, 04:01:25 AM »

Hi PJM
Thanks, you get 0.8 book for the commons right? The otm shares are cheaper by another 17% so would give us slight better margin of safety.

Hi Gary

This seems to be almost the same investment as Bank Of Ireland by Prem & WR club.

I spent some time today understanding the financials of EuroBank, and it does look interesting. The situation in Greece is definitely improving so it wont be surprising to see PPI and NIM improving as a result of lower deposit spreads and reduced 90dpd, which peaked over last few years. Not sure if 21% CLP estimates are conservative enough.

After the new capital offering (which will start trading today) i think the BV should be around 7b which translates into 0.46euro, so the stock is trading 0.8x of BV. Not a very big margin of safety imo, unlike Bank of Ireland.

Are you investing just to replicate Prem & Wilbur, or you have any other investment thesis?

PJM

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Re: Eurobank - EGFEY
« Reply #4 on: May 09, 2014, 04:25:36 AM »

Hi PJM
Thanks, you get 0.8 book for the commons right? The otm shares are cheaper by another 17% so would give us slight better margin of safety.

Hi Gary

This seems to be almost the same investment as Bank Of Ireland by Prem & WR club.

I spent some time today understanding the financials of EuroBank, and it does look interesting. The situation in Greece is definitely improving so it wont be surprising to see PPI and NIM improving as a result of lower deposit spreads and reduced 90dpd, which peaked over last few years. Not sure if 21% CLP estimates are conservative enough.

After the new capital offering (which will start trading today) i think the BV should be around 7b which translates into 0.46euro, so the stock is trading 0.8x of BV. Not a very big margin of safety imo, unlike Bank of Ireland.

Are you investing just to replicate Prem & Wilbur, or you have any other investment thesis?

ADR normally trade at a discount or premium and they stay, so you can assume ADR will always stay at 15-17% discount. This is at least what i've seen with other ADRs. Also have you checked on the annual fees for ADR as they can be quite steep sometimes.

oddballstocks

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Re: Eurobank - EGFEY
« Reply #5 on: May 09, 2014, 04:43:33 AM »

Hi PJM
Thanks, you get 0.8 book for the commons right? The otm shares are cheaper by another 17% so would give us slight better margin of safety.

Hi Gary

This seems to be almost the same investment as Bank Of Ireland by Prem & WR club.

I spent some time today understanding the financials of EuroBank, and it does look interesting. The situation in Greece is definitely improving so it wont be surprising to see PPI and NIM improving as a result of lower deposit spreads and reduced 90dpd, which peaked over last few years. Not sure if 21% CLP estimates are conservative enough.

After the new capital offering (which will start trading today) i think the BV should be around 7b which translates into 0.46euro, so the stock is trading 0.8x of BV. Not a very big margin of safety imo, unlike Bank of Ireland.

Are you investing just to replicate Prem & Wilbur, or you have any other investment thesis?

ADR normally trade at a discount or premium and they stay, so you can assume ADR will always stay at 15-17% discount. This is at least what i've seen with other ADRs. Also have you checked on the annual fees for ADR as they can be quite steep sometimes.

There shouldn't be any ADR discount.  You can convert your ADR shares into ordinary local shares and capture the spread.  I've inquired about this with Fidelity in the past.  There is a per share fee of $.01-.05 depending on the size of the trade.

The better trade here in my mind is to buy up as many ADR's as humanly possible (maybe levered), and then short the common.  Convert the ADRs into the common and satisfy the short.
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gary17

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Re: Eurobank - EGFEY
« Reply #6 on: May 09, 2014, 05:06:30 AM »
Yes there's a ADR fees but that is still a wide margin after one takes that into consideration. This happened with bank of Ireland before , bit it was the commons that was mispriced. This time around it is the ADR ! Interesting strategy. Not sure if IB let me short Athens shares.

PJM

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Re: Eurobank - EGFEY
« Reply #7 on: May 09, 2014, 05:31:12 AM »

Hi PJM
Thanks, you get 0.8 book for the commons right? The otm shares are cheaper by another 17% so would give us slight better margin of safety.

Hi Gary

This seems to be almost the same investment as Bank Of Ireland by Prem & WR club.

I spent some time today understanding the financials of EuroBank, and it does look interesting. The situation in Greece is definitely improving so it wont be surprising to see PPI and NIM improving as a result of lower deposit spreads and reduced 90dpd, which peaked over last few years. Not sure if 21% CLP estimates are conservative enough.

After the new capital offering (which will start trading today) i think the BV should be around 7b which translates into 0.46euro, so the stock is trading 0.8x of BV. Not a very big margin of safety imo, unlike Bank of Ireland.

Are you investing just to replicate Prem & Wilbur, or you have any other investment thesis?

ADR normally trade at a discount or premium and they stay, so you can assume ADR will always stay at 15-17% discount. This is at least what i've seen with other ADRs. Also have you checked on the annual fees for ADR as they can be quite steep sometimes.

There shouldn't be any ADR discount.  You can convert your ADR shares into ordinary local shares and capture the spread.  I've inquired about this with Fidelity in the past.  There is a per share fee of $.01-.05 depending on the size of the trade.

The better trade here in my mind is to buy up as many ADR's as humanly possible (maybe levered), and then short the common.  Convert the ADRs into the common and satisfy the short.

Theoretically you are right !!

All the Indian ADRs are always trading at a constant high single digit premium/discount. Maybe it is coz its difficult to short in India.

I tried the arb strategy for HRTPY (brazilian adr) but found that IB doesnt do the conversion and the fees were quite high if I transferred the shares to depository manager and then converted it.

Cunninghamew

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Re: Eurobank - EGFEY
« Reply #8 on: May 09, 2014, 07:03:32 AM »
On Schwab it is 5 cents a share, so that wipes that out

gary17

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Re: Eurobank - EGFEY
« Reply #9 on: May 09, 2014, 07:10:51 AM »
Ok... It just went up 9% from down 3% a few minutes ago .... And I haven't finished buying ....