They've made a total of 465 Mil RON Net Profit for the full year 2011.
Right now the share price of BRD costs 11,25 RON which makes BRD having a PER (Price to Earnings Ratio) of 17,09. This means that if you would pay 11,25 RON for one share of BRD and BRD will distribute all their Net Profit as dividends, you will have to wait 17 years to make the 11,25 RON that you've paid for one share.
And this PER you compare it with other companies from this sector:
- Barclays PLC - listed at London Stock Exchange has a PER of 9,87
- Societe Generale (the mother company) - listed at Paris Stock Exchange has a PER of 6,96
- Raiffeisen Bank - listed at Vienna Stock Exchange has a PER of 6,03
- Banco Santander - listed at Madrid Stock Exchange has a PER of 7,99
- ING Groep - listed at Amsterdam Stock Exchange has a PER of 6,80
Of course BRD won't distribute their whole Net Profit as dividends, usually they distribute around 30 to 40%, which will make this price even more expensive. But this is the fundamental of the BRD, let's have a look at the price chart (this is a weekly chart, which means that one bar on the chart represents one week):
As you can see the price swings from 16 to 10 and back starting April 2010. The RSI (Relative Strength Index - which shows overbought or oversold conditions of a security) went oversold and then came back to neutral, which is typically of bear markets.
Conclusion: If the international context becomes increasingly worrying, than I assume the price of BRD will break to the downside this lateral movement on the way to retest the lows around 4 RON. But if the international markets will stay up and moving higher I think the market participants won't look at the fundamentals and will push the price higher to reach again the 16 RON and probably break it to the upside to reach 22 RON.
Happy trading everybody!
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