Today's Buy Opportunity: National Bank of Greece

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It was a little more than four months ago that our Motley Fool Global Gains research team first highlighted National Bank of Greece (NYSE: NBG) as one way to profit from the Greek crisis. Since then, the bank's stock is down 25% even though investors have more insight into how Greece's debt crisis is going to play out. That would make sense if the situation looks worse for Greece today than it did on April 1, but the fact is that it looks better. This makes National Bank of Greece an even better buy today than it was back then, and that's the reason why it's today's "11 O'Clock Stock."

Fast facts on National Bank of Greece

Source: Capital IQ, a division of Standard & Poor's. N/A = not applicable.

Why I'm not worried about the worst-case scenario
The problem facing NBG back in April was that it held more than $23 billion worth of Greek sovereign debt on its balance sheet, and the world feared the Greek government would fail to make good on the $25 billion worth of debt payments it had to make by the end of May. Thanks to some help from the EU, however, the country was able to meet its obligations. And while Greece continues to face a significant debt load, the country is making good progress getting its financial house back in order. The country achieved the June targets imposed on it by the EU and the International Monetary Fund, and the consensus is that thanks to efforts such as improved tax collection, Greece is doing better than expected.

The reason this matters for NBG is because of that Greek sovereign debt it holds. If Greece were to default, NBG would have to write down the value of those assets, making the bank undercapitalized by regulatory standards. That would cause a recapitalization, likely via the issuing of new shares, which would wipe out existing investors. So long as NBG can avoid this fate, the bank's operations should recover with the Greek economy. Although the bank's first-quarter results in Greece weren't spectacular -- non-performing loans increased to 6.9% of total loans, for example -- the company collected more than $1 billion in deposits, which is evidence that there is not a run on Greek banks.

And then there was Turkey
Further, this drama in Greece is masking what has been some impressive growth by NBG of its operations in fast-growing Turkey. Loans grew 14% year-over-year in Turkey on the back of rising consumer spending and credit cards. The company also saw improving asset quality and invested significantly in branch expansion. This bodes well going forward because, as we saw evidence of in the steady ARPU numbers and rising postpaid subscriber share reported in Turkcell's (NYSE: TKC) recent results, the Turkish economy appears to be on a strengthening trajectory.

Why this is an opportunity
All told, if you believe that National Bank of Greece can continue to exist, it should be worth substantially more in three to five years than it is today. Consider, for example, that while trailing price-to-book multiples aren't the best way to analyze an industry with as many potential landmines as banking, National Bank of Greece stock is about as cheap as it gets when it comes to buying a large banking franchise in either the U.S. or Europe.

Data from Capital IQ.

Yes, banks in Scotland and Ireland look cheaper, but they are both significantly more troubled than NBG and don't have the same fast-growing emerging-markets exposure.

Put it all together and provided you can handle some volatility and potential political turmoil, National Bank of Greece looks like a rewarding long-term buy.