This post was just published on ZYX Buy Change Alert.

This is the largest bank in Spain.  The bank is experiencing rapid growth outside Spain, especially in Latin America.  It is one of the cheapest banks in the world.

The position is long with an average price of $6.90.  Currently, 40% of the full core position size is being held.  Profits have been taken as high as $9.74.

This is a very long-term position.

It has been well known that at some point the bank would cut its dividend and do a secondary.  Above 7% dividend the bank was paying was unsustainable. Typically such events, when they are well known ahead of time, do not cause big down draft in large cap stocks.   The surprise here is that the secondary took place at about 10% discount.  This is a big negative because this shows that there was not enough demand for the new stock.   In-spite of this negative, the dip is a buying opportunity.

The new buy zone is $6.31 to $7.06.  The stock is trading at $6.99 as of this writing.  Target zone remains at $16 to $18.  Temporarily no hard stops.  A mental stop below $5.88.

What To Do Now?

Initiate or add to the position to the position to build up to 75% of the full core position size.

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