Wednesday, February 05, 2014

Puerto Rico Downgraded to Junk: Time to Buy Puerto Rico Stocks?

Standard & Poor's dropped the rating on Puerto Rico to BB+, which is considered junk status. A contrarian might think that now may be a good time to look at Puerto Rico stocks. Are there any stocks worth buying?

Some facts about Puerto Rico:
1. It is considered a high income country by the World Bank.
2. Its industries include petrochemicals, pharmaceuticals, agriculture, and technology.
3. The country receives over 5 million tourists per year.
4. One third of the tourists are cruise ship passengers.
5. The UN Development Program rated it high for the Human Development Index.
6. If it were a country, it would rank in the top 90 of all countries in terms of Purchasing Power Parity.
7. If it were a country, it would rank in the top 50 of all countries in terms of GDP per capita.
8. It was claimed by the Spanish Crown in 1493 following Columbus' second voyage to the Americas.
9. According to the CIA Factbook, it has the potential for onshore and offshore oil.
10. Tourism has benefited from the U.S. passport law which had cut down on the number of visitors to other non-U.S. Caribbean islands.

According to the free list of Puerto Rican stocks at, most of the stocks are in the banking industry, a great play if you are looking for a turnaround.  However, some of these stocks are low cap, so they should be considered very speculative.

Oriental Financial Group Inc. (OFG), which trades on the NYSE, is a bank holding company which owns Oriental Bank and Trust. The stock trades at 16 times trailing earnings and seven times forward earnings. Earnings for the quarter ending September 30 were up 10.5% on an 18.3% rise in revenues. The company just reported earnings for the fourth quarter ending December 31, with earnings per share of $0.35 per share versus a loss of $0.53 per share. The stock has a dividend yield of 2.2% and pays quarterly.

Popular Inc. (BPOP), which trades on NASDAQ, is a financial holding company which owns Banco Popular de Puerto Rico, and provides banking, leasing, and insurance services. The P/E ratio is 4.6, with a forward P/E of 8.8. For the quarter ending December 31, earning were up an incredible 94.2% on a great 27.5% revenue boost.

For a list of other Puerto Rico stocks, which can be downloaded, sorted, and added to, go to
Author does not own any of the above.


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