BLX
Banco Latinoamericano de Comercio Exterior, S. A.
$55.10
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 39.5% below fair value
You pay
$55.10
Bear
$58.78
Fair
$91.01
Bull
$110.35
Bear
$58.78
+6.7%
ROTCE 10.2% → 1.31x TBV
Fair
$91.01
+65.2%
ROTCE 13.6% → 2.03x TBV
Bull
$110.35
+100.3%
ROTCE 15.6% → 2.46x TBV
Key Value Driver
ROTCE (13.6%) vs. cost of equity (8.7%)
Implied Market Multiple
1.23x
Summary
With ROTCE of 13.6% vs. 8.7% cost of equity, fair P/TBV is 2.03x on $44.80 tangible book, implying $91.01 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly