To date, the euro zone debt crisis has not been kind to the National Bank of Greece (NBG, quote) and its shareholders. But some institutions will endure in Greece, as it will remain a functioning society, no matter how much pain its consumers will absorb in the years (or decades) ahead.
Like cockroaches, some money center banks will survive no matter what the calamity; as they are needed to help the government function. However, at well under $2 a share, investors are certainly looking at little more than “fog on the mirror” prices for the National Bank of Greece.
Its 52-week high was $11.85. Such a fall has resulted in very impressive ratios on the balance sheet. The price-to-book ratio is 0.18. The price-to-sales ratio is 0.23. The price-to-cash ratio is 0.28. The National Bank of Greece has no long-term debt.
On the income statement, the full fury of the euro zone debt crisis manifests itself. The profit margin is near a negative 40%. Returns on assets and returns on equity are both negative, too. Earnings growth is down, also.
The trend is certainly not the friend of shareholders, either. The stock is down for the week, month, quarter and year. It is trading beneath its 20-day, 50-day and 200-day moving averages.
Legendary investor John Templeton, selected “Stock Picker of the Century” by Money magazine, made his first fortune buying battered shares of US companies during the Great Depression, as detailed in a previous article on www.emergingmoney.com. Within a four-year period, he posted returns well into the triple digits.
The National Bank of Greece is certainly priced at that level at just $1.70 a share. The exchange-traded fund for European banks, iShares MSCI European Financials (EUFN, quote) is down about 30% for the last 52 weeks.
Some banks have to survive. A financial system has to operate, to some degree. In addition, the government of an country will esnure that some domestic banks operate to transact necessary business functions.
Over the next year, earnings are expected to rise more than 100% at the National Bank of Greece.