Citi says sell – which means time to buy Bank of Ireland

Citigroup (C, quote) has initiated coverage of the Bank of Ireland (IRE, quote) with a “Sell” rating, citing the Irish recession and its impact on IRE’s performance. The impact is real, but investors should be buying to accumulate a long term position in the Bank of Ireland and other blue chips.

Bank of Ireland: not going anywhere

The Bank of Ireland has some appealing features on its balance sheet and income statement. The price-to-book ratio is 0.50. The price-to-sales ratio is 0.88. The price-to-cash-per-share ratio is 0.88. Those are all very solid. Of great importance is a low debt-to-equity ratio of just 0.14.

Earnings growth is up, too. On a quarterly basis, earnings-per-share growth has increased by 111.67%. This year, earnings-per-share growth is up by 96.78%.

Until now, 2012 has been good for IRE’s stock performance. Year to date, it is up 69.10%, but it has dropped 6.76% over the last week of action as traders react to the recession and the Citigroup downgrade.

It has been a challenging week for European banks as the exchange traded fund for the sector, iShares MSCI Europe Financials Index (EUFN, quote) is down 2.69% for the period.

The Bank of Ireland has powerful supporters such as Wilbur Ross, and financial authorities around the world are committed to protecting the financial system. If the Bank of Ireland made it through The Great Recession, it is here to stay, and long-term investors will profit when when the economy recovers and the stock rises again.

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