Shutterstock photo
Markets

Manager of the decade Bruce Berkowitz is buying Banco Santander — again (STD)

Shutterstock photo

Shutterstock photo

Bruce Berkowitz founded the Fairholme Fund in 1999 and posted returns of 25.2% in 2010 from stocks such as Banco Santander ( STD , quote ). Now he is building his position again. The attractiveness of STD has been previously detailed on www.emergingmoney.com in articles such as " Banco Santander will rise, while the dividend compensates for the wait ."

STD that provides banking and financial services throughout the Americas and Europe. After being savaged by Spain's credit woes, the company's dividend has soared to an effective yield of 12%. At present, the average dividend yield for a stock on the Standard & Poor's 500 Index is less than 2%.

Despite Spain's problems, STD's high dvidend yield is supported by a low payout ratio of just 36.44%. With a payout ratio this low, not only is the dividend sustainable, but there is plenty of room for increases.

The fundamentals are there with a price-to-earnings ratio of under 6, a price-to-book ratio of 0.61 and a price-to-cash ratio of 0.50.

As for Berkowitz, the star manager bought a new position of 510,000 shares of Banco Santander in the third quarter after selling out earlier in the year.

Other professional investors like Banco Santander as well. The mean analyst rating is 1.50, which is very bullish -- a 1 is the highest, equivalent to "strong buy," while a 5 is the lowest.

With shares now around $7.50, the mean analyst target price for STD over the next year is $15.34.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos