HDFC Bank (HDB)
By Paul Goodwin, Chief Analyst, Cabot China & Emerging Markets Report
From Cabot Wealth Advisory 1/27/15 Sign up for Cabot Wealth Advisory—it’s free!
My stock pick today is one that should have shown up on your radar if you’re on the lookout for emerging markets stocks in very strong uptrends.
It’s HDFC Bank (HDB), one of the largest private banks in India. The bank is huge, with over 3,400 branches and 11,000 ATMs in nearly 2,200 cities and towns across India. Its customer base expanded by 3,000,000 in 2014 as India’s economy gathers strength.
The economy of India is of special interest to economists right now because the country’s Prime Minister Narendra Modi, is considered to be very pro-business. Plus, his party has working majorities in both houses of the Indian legislature.
Many investors feel that India is at a turning point, where a modest push toward development of the country’s infrastructure will yield outsized results in economic development.
HDFC Bank, with exposure to retail through credit and debit cards, to wider ownership of automobiles through auto loans and to increasing real estate sales through mortgages, is ideally situated to reap the advantages of India’s growth.
One look at the chart for HDB will likely convince you that something significant is going on. HDB enjoyed good performance during much of 2014, but was in a volatile consolidation during the last few months of the year. But starting on January 15, the stock began to explode higher. In the last seven trading days, the stock has run from 51 to 62 on big volume.
An investment in HDB on any reasonable pullback will likely pay dividends. But if you’re really interested in getting the most out of the economic development of India (and all other emerging market), you should consider taking a subscription to Cabot China & Emerging Markets Report, which I write. The Report will clue you in to all the news and the strongest stocks around the developing world. And it will stick with them, advising you on how to buy and when to sell. I think you’ll like it.
From Cabot Wealth Advisory 11/5/12 Sign up for free Cabot Wealth Advisory e-newsletter
My stock pick today an emerging markets stock that I have on the watch list in my advisory, Cabot China & Emerging Markets Report. It was also recently featured in Cabot Top Ten Trader:
"HDFC Bank (HDB) is a regional financial concern based in Mumbai, India. Like most big banks, HDFC provides a range of services, including banking and treasury operations, with overseas operations in Bahrain and Hong Kong.
"While many investors have been keen on U.S. banking concerns in the wake of additional quantitative easing, foreign banks like HDFC have largely been shunned due to exposure to the European economic crisis. However, according to reports from the International Monetary Fund, India's protectionist approach to economics has largely sheltered the country's banking system from European fallout.
"What's more, many analysts believe that the country's current round of economic reforms should provide a solid floor for India's economy. HDFC has been quick to capitalize on India's reform efforts, announcing earlier this month that second-quarter net revenue surged 22%, bolstered by notable hikes in deposits and loans as well as improving net interest income and fee-based revenues.
"Overall, the company's exposure to India's rapidly expanding retail credit market bodes well. Investors should be aware that competition is fierce in India's emerging retail-credit market, but the strength of HDFC's other banking operations should give it a leg up on the competition."
If you want continuing advice on HDFC Bank and other top emerging markets stocks that trade on U.S. exchanges, check out the Cabot China & Emerging Markets Report. Click here to learn more.
|HDFC Bank (HDB)
HDFC Bank House
Senapati Bapat Marg
Mumbai, 400013 India
91 22 6652 1080
|Index Membership: N/A
Industry: Foreign Regional Banks
Full Time Employees: 66,076
11/5/12 HDFC Bank (HDB): Has a leg up on the competition