Thursday, September 27, 2007

A cheap, fast-growing Chilean stock

Administradora de Fondos de Pensiones de Provida SA(PVD) is a Peruvian pension benefit administrator. It is the rough equivalent of a Prudential. It has a P/E of 7.8 with a 5.8% dividend yield(additionally, the dividend has been growing at a 12% annual rate for the last five years). The margins are enormous for this business. Return on Assets is 15.8%: return on equity is 26.4%. The margins are very healthy( operating margin of 35.6%), it's sitting on over $300 million in cash and has no debt. Oh, and let's not forget that year over year profits have nearly quadrupled. I usually don't like to recommend stocks that have just hit a 52-week high, but this stocks is just too cheap.

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