For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"Don't get scared off by the name at Credicorp (NYSE: BAP), my favorite 'home run' pick for 2008," explains John Reese, of Validea, a quantitative advisor service based on following the strategies of leading market gurus such as Peter Lynch and Warren Buffett.
"While US banks have been floundering amid the credit and subprime crises, this Peruvian upstart has sparkled, gaining 30% since mid-August.
"The holding company's businesses are involved in commercial banking, insurance, and investment banking, and, if subprime's got you down, consider this: Credicorp's main subsidiary, Banco de Credito del Peru, actually grew its mortgage business 8.2% in the third quarter as Peruvians' purchasing power continued to increase.
"What's more, Credicorp's fundamentals are so strong that it's one of just three stocks currently getting strong interest from three or more of my 'Guru Strategy' computer models -- those that I base on the writings of Peter Lynch, Martin Zweig, and The Motley Fool's David and Tom Gardner.
"Credicorp's P/E-to-Growth ratio -- a measure that Lynch pioneered to identify growth stocks selling on the cheap -- is 0.43, falling into both of these models' best-case categories.
"My Zweig-based model, meanwhile, likes the fact that Credicorp's earnings aren't just increasing but accelerating: While the bank's long-term EPS growth is an impressive 42.44%, its growth in the current quarter is an even-better 76.56%. Want more? How about Credicorp's 26.74% profit margins or its 10% equity/assets ratio?
"Broader numbers are also exciting: Peru's growing economy is expected to continue expanding at about 7% annually in the coming years, Reuters recently reported. A financially sound, profitable business situated in the middle of a dynamic economy -- this stock has 'upside' written all over it."
Struggling Playboy outsources business ops
J. Crew earnings preview: A strong Q3 all buttoned up?
Twitter to make acquisitions, generate revenue in 2010
