This article is part of our Rising Star Portfolios series.
I've been considering Banco Santander
In fact, the last time I wrote about the company, I asked readers which bank they'd most like to own: Santander, National Bank of Greece
Is it time to buy?
I've been touting the positive attributes of this Spanish banking giant for a long time, so you would think if the stock took a hit -- as it has lately -- that I would be jumping to strike while the iron was hot. And normally, I would. Santander has shown in the past year that it's not afraid to make moves, whether it be an acquisition or retail expansion to steal market share from major competitor Banco Bilbao Vizcaya. Just check out some of the activity in 2010:
- Santander bought U.K. assets from Royal Bank of Scotland that included 300 retail branches.
- In June, it bought back about a quarter of its Mexican unit from Bank of America
for $2.5 billion. (NYSE: BAC)
- Around the same time, it bought $3.2 billion of auto loans from Citigroup
. (NYSE: C)
- The company has talked with M&T Bank
to explore merging Santander's Sovereign Bank into M&T's retail operations. (NYSE: MTB)
And most recently, General Electric
All of this is great news, at least in my opinion, for a company that has more than $300 billion in cash on its balance sheet and is constantly scouring the tortured banking landscape for great deals. However, the Spanish housing market is still struggling to stay afloat, as new information emerged last week that shows sales are down 50% since summertime and prices could drop an additional 30%. This would obviously wreak havoc on the books of many banks, and Santander certainly isn't immune to the pain. Its diversified revenue stream will surely help, but Spain continues to be a scary place to invest.
For that reason, I'm still holding off on Santander, but don't be surprised if I pull the trigger should the price continue to decline.
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