We recently published a list of Jim Cramer October Calls: Top 10 Stocks. Since Banco Santander SA (NYSE:SAN) ranks 10th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC talked about the ills of “complacency” in investing and how sticking to a specific narrative costs investors money. He was criticizing negative analyst reports that keep downgrading stocks.
“We always hear how the bulls are being complacent and ignore downside risk. We almost never hear that the bears are being complacent and missing out on terrific opportunities, which I find to be absurd. Nobody does complacency like the bears. Remember, last night I spent a lot of time talking about how we had a slew of downgrades yesterday that I did not like, and stocks reacting to negative news already. Today, they seem like fortuitous notes that would end up costing you money if you listen to them.”
Cramer said that some analysts like to “take aim” at long-term winners and scare people out of some “amazing gains.” This, Cramer believes, is “downright wrong.” He said that even if investors want to sell a stock based on a downgrade, they should wait for it to “bounce” before pulling the trigger.
For this article we talked about 10 stocks Jim Cramer is talking about during his programs on CNBC. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Banco Santander SA (NYSE:SAN)
Number of Hedge Fund Investors: 9
When asked about HSBC, Cramer said in a latest program that this stock is just “OK.”
“If you want to own a foreign bank please own Banco Santander SA (NYSE:SAN), that’s a real good one.”
Banco Santander is a Spanish banking stock with a PE ratio of just under 6. The stock is up about 18% so far this year.
Santander continues to progress towards its medium-term goal of achieving a return on tangible equity (ROTE) between 15% and 17%.
In the first half of the year, the bank’s net interest income (€23.5 billion), fee income (€6.5 billion), and parent company profit (~€6.1 billion) all hit all-time highs, with a cost-to-income ratio of 41.6%, the best in 15 years.
Banco Santander SA (NYSE:SAN)’s geographic operations often move in different directions. Spain, which accounted for about 25% of first-half earnings, continues to perform well, with net interest income up more than 15% year-over-year to €3.65 billion. Spain’s ROTE exceeded 20%, a roughly seven-point improvement from a year ago. In Brazil, lower interest rates drove a nearly 40% increase in net income to €1.1 billion, with ROTE rising to 15.8%. This offset weaker performance in other areas, such as the U.K., where higher funding costs and mortgage pressures led to a 23% drop in first-half net profit and a ~300 basis point fall in ROTE to around 10.8%.
Overall, Banco Santander SA (NYSE:SAN) ranks 10th on Insider Monkey’s list titled Jim Cramer October Calls: Top 10 Stocks. While we acknowledge the potential of Banco Santander SA (NYSE:SAN), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SAN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
