What really matters in the Cajas converted into banks IPO´s is the price. We should not forget that even if the company is not in great financial shape, a very cheap share could become a really profitable investment.
I say "very cheap" with some intent. Investors must not forget that although the real state and construction bubble deflated naturally, through bankruptcies and defaults, that has not been the case with the financial bubble that supported it. At the end of the day, the same financial entities are still the same, maybe grouped or merged with others.
Taking a broader view and considering that all financial companies aren't the same, the Spain´s financial sector suffers the same parallels once experienced by shipbuilders or coal mining companies: the industry is overrated.
By buying shares in these companies investors should consider how much they're willing to pay for a company included in a sector where there is no shortage, but an excess of companies.
Víctor Alvargonzález, CEO Profim, Asesores Patrimoniales, EAFI.
Translated and Edited in English by Jose L. De Haro
