Banco Santander: A Bank Stock You Can Bank On

Originally a Spain-centric operation, Banco San has expanded impressively in Europe (47% of revenue) and Latin America (43% of revenue). Moreover, it's become a key player in Brazil, Mexico and Chile. In other words, Banco San has an impressive emerging market presence, where GDP growth will be stronger as the global economic expansion progresses.

Look for a 5% to 7% revenue increase for the stock in FY2010. The First Call FY2009/FY2010 EPS estimates for STD are $1.55 to $1.85.

Technically, Banco San's stock chart is strong -- a staircase, with its price rarely touching the key, 50-day moving average, a sign that institutional investors (IIs) are adding to/establishing positions. True, STD did fall below the 50-day MA to close out 2009, but most of that was year-end profit-taking by short-term IIs: STD traded below $8 earlier in the year before rising to $18. View the pull-back as a buy opportunity.

2010 Outlook: STD is a long-term play, but if you're looking to sell STD within the year, take your profits after it rises above $23.

Stock Analysis: Banco Santander SA is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in STD now, then buy another 25% in one month, if European and Latin American economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your STD position before March 2010. Sell/stop loss if you were to buy shares in this company: $8.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.