Dallas, Texas 10/17/2013 (Financialstrend) – Banco Bradesco SA (ADR) (NYSE:BBD) is a Brazil based banking giant with a market cap of $63 billion. Over the past few months this financial institution is consolidating its position while the wider Brazilian economy is taking a short breather. The emerging economy has relatively slowed down over the past two quarters. This has led to softness in asset values which Banco Bradesco has been attempting to take advantage off. It is in this context that one should view October 15 SEC filing of BBD.
As per the notification we understand that Banco Bradesco has acquired 6.5% additional stake in Odontoprev S.A. With the latest acquisition, the total holding of Bradesco will go up to 50.1%. Readers should note that before October 15 acquisition, BBD held close to 43.5% of the outstanding stock of Odantoprev through its subsidiary Bradesco Saude S.A. The 6.5% stake was bought from Randal Luiz Zanetti. In spite of his stake sale, Mr. Randal will continue to hold the post of Board of Executive Officers of Bradesco Seguros S.A. The SEC filing specifies that this stake purchase transaction is yet to be approved by the central bank of Brazil.
This Brazilian bank has paid out regular dividends over the past quarters. Shareholders have received close to $0.59 per share through the past 12 months. This translates to 3.9% forward yield which while conservative is comparatively better than stock yields from U.S based banks. On October 16, as the rumours about the impending federal budget deal started to make the rounds, the banking stock appreciated by 1.4% to settle at $15.2 per share as of close of business. This translates to a close to 6% increase in valuation over the past week of trading and by 13% in the past one month. A current valuation takes the stock price above the PT of $14.57.