Je hebt gelijk heb het gelezen;Credit Agricole, Lukoil, Samsung Battered Into Cheapest Stocks
By Michael Tsang and Daniel Hauck
Sept. 10 (Bloomberg) -- French banks, South Korean semiconductor makers and Russian energy companies have become the world's biggest bargains after stock markets around the world lost more than $5 trillion in value.
Credit Agricole SA, France's second-largest lender, trades at a 19 percent discount to Citigroup Inc., the world's biggest financial services company, data compiled by Bloomberg show. Samsung Electronics Co., the top maker of memory chips, was valued last month at the cheapest versus U.S. chipmakers since July 2004. OAO Lukoil, Russia's No. 1 independent oil company, is 34 percent less expensive than Exxon Mobil Corp.
The industries were indiscriminately punished when the Morgan Stanley Capital International AC World Index tumbled 12 percent between July 13 and Aug. 16, according to Credit Suisse Group, Putnam Investments and ING Groep NV. As contagion from defaults on U.S. subprime mortgages drove credit costs to the highest since January 2001, their stock prices compared with forecast earnings fell to between 7.21 times and 8.62 times, Bloomberg data show.
``The stock market was painted with a broad brush and investors threw the baby out with the bathwater,'' said Robert Weissenstein, the New York-based chief investment officer for private banking in the Americas at Credit Suisse, which oversees $1.33 trillion. French banks are ``a perfect example'' of a group that was pummeled unfairly, he said.
Buying Opportunity
Stocks retreated from all-time highs in July after late payments on U.S. subprime mortgages drove foreclosures to a record, according to the Mortgage Bankers Association in Washington. Borrowing costs between banks jumped to almost a seven-year high.
European banks and brokerages slumped after BNP Paribas SA, France's largest bank, halted withdrawals last month from three funds invested in subprime-linked securities. Paris-based BNP, which has since reopened the funds, lost 12 percent this year.
French commercial bank stocks are now the cheapest among those in developed European economies, valued at a median 7.96 times forecast profit, the Bloomberg data show. A gauge of banks in the MSCI France Index, which has fallen 21 percent since its 2007 high on May 11, trades at 7.94 times reported profit, the lowest in at least 12 years.
``You have to go back in some cases more than 10 years to find valuations like these,'' said John Ewart, who helps oversee $5.7 billion at Alliance Trust Plc in Dundee, Scotland. ``It's an opportunity to buy.''
Credit Agricole, Natixis
Credit Agricole and Natixis SA, France's second- and fourth- largest banks, are bargains, according to New York-based Lehman Brothers Holdings Inc., which raised its rating on Credit Agricole's shares to ``overweight'' last week.
The Paris-based companies reported profits on Aug. 30 that beat analysts' estimates. Credit Agricole said subprime defaults will have a ``limited impact,'' while Natixis said it should meet full-year profit goals, including any losses from mortgages to people with poor credit histories.
Credit Agricole trades at 8.1 times projected earnings and Natixis is valued at 8.3 times. That compares with 10 times and 9.36 times estimated profits at New York-based Citigroup and JPMorgan Chase & Co., the third-largest U.S. bank.
Credit Agricole last month traded at a 37 percent discount to Citigroup, the widest since at least 2004, according to data compiled by Bloomberg. Investors paid up for Citigroup even as New York-based Sanford C. Bernstein & Co. said the bank may forfeit as much as $1 billion of third-quarter profit because of mortgage defaults and losses on high-yield debt.
Stock Rebound
European banks were ``unfairly colored with the brush of subprime as though it was going to impact a much bigger percentage of their business than it is likely to,'' said David Joy, who helps oversee $160 billion as chief market strategist in Minneapolis at RiverSource Investments LLC, a unit of Ameriprise Financial Inc.
Stocks recovered some of their losses, with the U.S., European and Asian markets rising within 6.8 percent, 9.3 percent and 5.9 percent of their all-time highs. The Standard & Poor's 500 Index fell 1.4 percent last week to 1,453.55, while the Dow Jones Stoxx 600 Index lost 2.8 percent. The MSCI Asia-Pacific Index advanced 0.2 percent.
The most expensive industries are now health-care and consumer companies in Asia's emerging markets, the Bloomberg data show. The groups on average were valued between 33.9 and 34.9 times estimated profit. The median for all 12,948 companies tracked globally by Bloomberg stood at 15.1 times estimated profit.
Samsung and Intel
Cheaper valuations are a reason to be ``overweight'' Asian technology stocks, Zurich-based UBS AG said last week. A group of 15 South Korean chipmakers is valued at an average of 9.53 times estimated earnings. That's the least expensive among 46 Asian technology groups tracked by Bloomberg, excluding those with fewer than three members.
Samsung Electronics is valued at 10.9 times earnings and last month traded at the biggest discount to the Philadelphia Semiconductor Index since July 2004. The measure, which consists of 19 U.S.-traded chip-related companies including Santa Clara, California-based Intel Corp., ended last week with a price-to- earnings ratio of 38.7.
Intel, the world's biggest semiconductor maker, is valued at 28.6 times earnings.
Hynix Semiconductor Inc., the world's second-largest memory chipmaker, is even cheaper than Samsung. Ichon, South Korea-based Hynix is valued at 6.85 times profit. Both companies, which had second-quarter profit declines, forecast a rebound in chip prices in the second half as computer makers raise orders.
`Massive Demand'
``Things look better for the tech stocks,'' said Jorry Noeddekaer, a London-based manager at New Star Asset Management Ltd., which oversees about $50 billion, including shares of Samsung. ``There's going to be massive demand in the future.''
Eastern European energy companies are the cheapest among 40 emerging-market industry groups tracked by Bloomberg, with an average price-to-earnings ratio of 7.69, based on estimated profits. Russian oil producers are the least expensive after the government raised taxes on petroleum exports.
Lukoil, based in Moscow, trades at 8.3 times estimated profit, compared with 12.5 for Irving, Texas-based Exxon. The Russian oil producer is valued at $3.30 for every barrel of proven oil reserves, while Exxon and Paris-based Total SA, Europe's third-biggest oil company, trade at more than $13 per barrel, according to UBS.
`Unfair Ways'
OAO TNK-BP Holding, the Russian oil venture of London-based BP Plc, trades at 6.62 times estimated profit and is rated a ``buy'' at Citigroup and UBS.
``There are a lot of good plays in Russian oil,'' said Uri Landesman, the New York-based manager of international equities at ING Investment Management, which oversees about $400 billion, including shares of Moscow-based TNK-BP. The company ``is a dirt cheap stock,'' he said.
Hayes Miller at Baring Asset Management says the risk Russia's government may take over publicly traded companies or change rules that favor state-owned enterprises outweighs the potential returns for shareholders.