You're watching...
Dreman Value Management CIO Cliff Hoover on the outlook for Spanish banks and the impact of the Libor scandal on Barclays.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Very much.
Investors fleeing Spain today is that yields on that country's ten year bond totally opposite of what we see here you know hit a new record high and the Spanish stock market almost panel acted fell to levels not seen since 2003 but.
We've got somebody who says.
Dies then it's time to buy at least some of the European banks including one in Spain.
If you feeling brave -- the chief investment officer arrests are very good value management went clip appeared on the show back in December he recommend -- Bank of America if you had followed his -- guess what.
-- about who would be up 32%.
That's very impressive.
I'll try something cliff that was what -- your really strong calls that are.
Make another one.
And as it pertains to a Spanish -- well we've but we've picked out a few European global banks and -- broad brush with the old European consternation.
Consent and -- Banco Santander is one of those.
It's huge it's number one -- number one bank so -- -- famously a global bank universal bank.
Has a higher rating in the actual sovereign credit rating Spain itself.
It's trading about a half times press tangible book and when you have a chance to buy off a Barclays or Deutsche Bank percent and there -- and a half times -- tangible book and in the last couple decades so.
You know we see those couple banks that we own and in that area or are very unlike Spain.
Ann -- opinion Spain has that's not crisis much like we had in the 1990s early ninety's in the US -- an RTC which they're forming.
Right so just a matter of time as banks you know not -- double tomorrow but we think over time.
They should do very well okay over time so this is not one for the faint of heart -- or somebody -- impatient.
Next couple of years.
You know -- did you she could see that bank double usually.
Mean we see a lot of value and and and in the in the banks in general.
US banks as well essentially European banks write to us about the life scandal at a camp very quickly how concerned are you about that cause we know what -- stunned symbolically is that muscled -- management.
It goes on -- concerned about what -- can do to some of these banks was clearly an real issue.
You know some that we have to wade through and analyst this deep value investors we way through those issues from time and time Philip Morris document.
-- late ninety's with tobacco and that this issue I don't think it's gonna going to be a gigantic issue they find Barclays.
There will be some more headline risk and we'll -- through that's but at the end of the day we think -- -- Holiday hit too hard as a result of factors that you know outstanding -- today and so we UK that we've talked about you -- sometimes -- the Spanish bank to let the US back.
It was -- like Bank of America.
You know she's getting better every day why.
Stocks.
Again turning about half times process can worry about that that the countrywide affect deals trashing this company down.
Not this much is you know it when yearly look at the numbers the second quarter was actually pretty good and a court capital's growing.
Passive trends are improving that Merrill Lynch mostly don't know across the board actually loan growth was there when -- sort of port city.
We like Citi as well working anybody bank it six point six times -- a book -- -- a 40% of their revenue comes from emerging markets price.
And this is and an emerging market play over the next five or six years.
Although for those who bought it wanted when it split that's what he -- This triple split it's really.
-- at least if if that if that's what you're looking at that point you got -- -- to I guess you know but by.
Byron sit tight -- within maybe they can double here pretty easily.
Trillion dollars in deposits and earnings quality is improving.
So for anyone who has a year -- two time horizon you know tobacco and -- What's he starts go up okay he's couple years for the Spanish bank people don't get all hot under the path.
Let's call it god tactics allowed to come back clip right to say yes great to -- if you live everywhere they showed her.
