The Tremendous Value In Chinese Banks (If You Can Stomach The Risk)

The Tremendous Value In Chinese Banks (If You Can Stomach The Risk) by Joe Leider

There are three questions you should ask before buying a stock. Is it cheap? Does it have a future? Is it safe? If you can answer those three questions with a resounding yes, then you’ve found value. But when you ask those questions, you need the broadest and deepest sets of data possible. For example, if you want to buy Wells Fargo, you’d want to know its 10-year history as well as the results of its peers. In that vein, let’s look at 17 of the world’s largest banks by market capitalization.

Is it cheap?

In figure 1.1, I’ve plotted our banks by price-to-earnings and price-to-book ratios. While...