Best Stocks for 2008: Latin America banks on Banco Santander (STD)

"Santander's skipper, Chairman Emilio Botin, is a native of Santander in Spain's Calabria region, and the third generation in his family to pilot the bank. While others have been replacing management and writing off bad loans, Botin and his team have been busy expanding the franchise and making spectacular deals that bode well for the future.

"In one of the most dazzling transactions, Santander joined with Royal Bank of Scotland and Fortis to buy the Dutch giant ABN-AMRO. It was one of the biggest deals in the history of the financial industry, and one that produced a profit of more than 2 billion euros for Santander in just one month.

"Santander paid 19.9 billion euros for ABN's Banco Real in Brazil, and 6.6 billion euros for Italy's Antonveneta. The Italian property was quickly sold for 9 billion euros, leaving Santander with a huge profit and the real prize it wanted from ABN: The third largest biggest bank in Brazil.

"Grupo Santander boasts a balance sheet that shows solvency, with an enviable core capital ratio of 6%, an enticing 3% dividend, and a trailing PE of 13. (For those attracted to the dividend, we call your attention to STD's preferred stock, STD+I.)

"STD now has the wind at its back, as it sails the Latin American seas. When banks come back into favor, we believe those who bought into STD will be glad they jumped on board while every one else was swimming to dry land."