Stock Preacher

Popular Inc. (NASDAQ: BPOP)

Popular Inc. (BPOP) is a diversified bank holding company. The Company operates in three target markets: Puerto Rico, the mainland United States, and processing and other technology services in Puerto Rico, Venezuela, Florida and the Dominican Republic. In Puerto Rico, the Company offers an array of retail and commercial banking services through its principal bank subsidiary, Banco Popular de Puerto Rico (Banco Popular or the Bank). The Bank accounted for 66% of the total consolidated assets of the Company at December 31, 2008. Banco Popular has the retail franchise in Puerto Rico, with 179 branches and more than 600 automated teller machines (ATMs). The Bank also operates seven branches in the United States Virgin Islands, one branch in the British Virgin Islands and one branch in New York. Banco Popular has two subsidiaries: Popular Auto Inc., a vehicle financing, leasing and daily rental company, and Popular Mortgage Inc., a mortgage loan company with 32 offices in Puerto Rico.

BPOP was founded in 1917 and is headquartered in Hato Rey, Puerto Rico

Source: http://www.reuters.com/finance/stocks/incomeStatement?stmtType=INC&perType=INT&symbol=BPOP.O, https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?symbol=BPOP, http://www.bancopopular.com/us/about/investor/us-abu-inv-sto-en.jsp

Financial Summary

BPOP reported a net loss of $183.2 million for the quarter ended June 30, 2009, compared with net income of $24.3 million in the same quarter of 2008. For the six months ended June 30, 2009, the Company’s net loss totaled $235.7 million, compared to net income of $127.5 million for the same period in 2008. The Company discontinued the operations of its U.S. mainland-based subsidiary Popular Financial Holdings (PFH), and thus, the results of PFH are presented as part of “Loss from discontinued operations, net of income tax.” The Company retrospectively adjusted certain information, principally that impacting the statement of operations, to present in a separate line item the results from discontinued operations from prior periods for comparability purposes.

BPOP’s continuing operations reported a net loss of $176.6 million for the quarter ended June 30, 2009, compared with a net income of $59.2 million for the quarter ended June 30, 2008. For the six months ended June 30, 2009, the Company’s net loss from continuing operations totaled $219.2 million, compared to net income of $158.4 million for the same period in 2008.

Increased credit losses from the weakening economy have negatively affected the capital and earnings of BPOP. Like many financial institutions, BPOP has experienced significant declines in the value of collateral for real estate loans and heightened credit losses, which have resulted in record levels of non-performing assets, charge-offs and foreclosures.

A few of the principal items impacting the continuing operations’ financial results for the quarter ended June 30, 2009, when compared to the quarter ended June 30, 2008, were as follows:

Source: http://www.bancopopular.com/us/about/investor/us-abu-inv-sec-en.jsp

Analyst Consensus

This is the consensus forecast among 5 polled investment analysts. Against the Popular Inc. company.

The 2 analysts offering 12-month price targets for BPOP have a median target of 3.00, with a high estimate of 3.50 and a low estimate of 2.50. The median estimate represents a 14.07% increase from the last price of 2.63.

Source: Financial Times.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=BPOP.O

Investment Highlights

BPOP late last month announced that it will delist its 6.375% Non-cumulative Monthly Income Preferred Stock, 2003 Series A, and 8.25% Non-cumulative Monthly Income Preferred Stock, Series B (together, the “Preferred Stock”) from the Nasdaq. On September 18, 2009, the Company provided written notice to The NASDAQ Stock Market that BPOP has not arranged for listing and/or registration on another national securities exchange or for quotation of the Preferred Stock in a quotation medium. The Company initially announced its intention to delist the Preferred Stock in an exchange offer of its common stock for any and all outstanding shares of the Preferred Stock (Exchange Offer). The Exchange Offer, which was conducted pursuant to a prospectus dated August 7, 2009, expired 11:59 p.m., EST, on August 20, 2009.

BPOP, the leading financial institution in Puerto Rico, earlier this year said it reached an agreement to sell six branches in New Jersey and approximately $250 million in deposits to Investors Bancorp. The transaction is structured as an asset purchase for cash at a premium over the deposits and subject to regulatory approval and other customary closing conditions. Closing of the transaction is expected to occur within the third quarter of 2009.  In addition to the sale, BPOP also plans to close its in-store branch network in California, which represents 22 of its 46 branches in the state. Excluding the branches mentioned above, Popular operates 41 branches in the New York and New Jersey region, 16 branches in Illinois, 24 branches in Southern California and 23 branches in Florida. Popular operates 177 branches in Puerto Rico, where it holds the No. 1 market share in total deposits, and eight branches in the U.S. and British Virgin Islands.

BPOP’s third-quarter loss narrowed on a huge prior-year impact from discontinued operations as weakness in Puerto Rico and the U.S. continued, and is expected to for some time.

Source: Scottrade.com, Reuters.com, bancopopular.com

Technical Analysis

Source: www.stockcharts.com

Moving Average Price Compare

BPOP is below its 13-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

Bollinger Bands

BPOP has been relatively stable recently. This is evidenced by the width of its Bollinger Bands, which are tighter than normal. Additionally, BPOP is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and due for either a pause or retracement.

MACD

BPOP’s MACD is indicating a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9-day moving average or signal line. This suggests that positive momentum has begun to slow.

Comparative Analysis

Source: Reuter.com, Nasdaq.com

Insider Trading Activity

Net Share Purchase Activity

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