– big ideas for global investors Search
   Member Access       Sign-up       Newsfeeds        Companies        Stock Directories       Research       Video       Funding   

Company Update: Bancolombia - Overhang cap behind; Reiterating our HOLD after strong market reaction (T.P. COP 30,000 (loc) / USD 60.0 (ADR))

Ideas get bigger when you share them...

March 26, 2014 ( newswire) After high uncertainty regarding dilution and capital adequacy throughout 2013, Bancolombia finally managed to raise around COP 2.7 tn (USD 1.3 bn) through the issuance of 110 mn preferred (non-voting) shares. A week before the closing of the order book, PFBCOLO started a strong rally.

Join Investor Ideas Members to access the Renewable Energy stocks directory, water stocks, biotech stocks, defense stocks directories and the Insiders Corner

Despite the better-than-expected results of the capital injection, the strong outperformance of the shares will limit further outperformance according to fundamentals. As mentioned in our previous update, we strongly believed that once the overhang risk faded, shares would respond to fundamentals. However, currently trading at 1.5x 2014E P/B, PFBCOLO does not offer significant value, given our 1.7x target multiple for 2014. Moreover, the Bank still faces several challenges on efficiency and consolidation that will maintain ROAEs pressured in the mid-term, even though we consider a positive the new strategy focused on efficiency and profitability.

  • Finally, some profit-taking from the recent capital injection can be expected, putting some price pressures in coming months after the recent outperformance of PFBCOLO.
  • After eliminating our adjustment for the issuance, our new T.P. is COP 30,000/share, with a fundamental value of COP 30,200/share (very similar to our last update). Our valuation exercise combines a DDM, and an analysis of ROAE-adjusted and historical forward multiples. We reiterate our HOLD rating on the shares.

For charts, tables and the full report, see the attached file.

Credicorp Capital

La información contenida en este mensaje es confidencial y para conocimiento exclusivo del destinatario. La información y opiniones contenidas en este mensaje pertenecen únicamente al remitente, excepto cuando en el cuerpo del mensaje se establezca lo contrario y el remitente esté autorizado para enviar dicha información con carácter definitivo y oficial de Credicorp Capital. La información relacionada con su cuenta, los extractos, informes financieros y de productos, sólo será vinculante en la medida en que sea remitida por los canales y en los formatos que Credicorp Capital determine. Las opiniones, conclusiones o cualquier otra clase de información contenida en este correo no relacionadas con los fines del negocio de Credicorp Capital, deben entenderse como personales y bajo ninguna circunstancia son avaladas por Credicorp Capital. Si usted ha recibido este mensaje por error por favor proceda a eliminarlo, y notificar al remitente. De cualquier manera, usted no debe usar, divulgar, revelar, distribuir, imprimir, copiar o adulterar en forma parcial o total este mensaje. Credicorp Capital no se hace responsable por la eventual transmisión de virus o programas dañinos por este medio. Credicorp Capital, no se responsabiliza por eventuales daños o alteraciones como consecuencia de la recepción o uso del presente mensaje.

More Info:

This news is published on the Newswire and its syndicated partner network

Publish Your News - Send a release
News now!

Get free news alerts: Sign up here

Published at the Newswire - Big ideas for Global Investors

Disclaimer/ Disclosure:The newswire is a third party publisher of news and research as well as creates original content as a news source. Original content created by investorideas is protected by copyright laws other than syndication rights. Investorideas is a news source on Google news and Linkedintoday plus hundreds of syndication partners. Our site does not make recommendations for purchases or sale of stocks or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated by featured companies, news submissions, content marketing and online advertising. Contact each company directly for press release questions. Disclosure is posted on each release if required but otherwise the news was not compensated for and is published for the sole interest of our readers. More disclaimer info:

BC Residents and Investor Disclaimer : Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: Global investors must adhere to regulations of each country.

Free News Alerts


Investor Ideas © 2000 - 2014®, ECON

Sign up here

login | logout | about us | contact | disclaimer / disclosure |
advertise | company profile directory | partners / links |
job search | privacy policy | trade | services | sitemap |