E Good News, Bad News

Stock markets are caught between two temptations, fear and trembling over uncertainties over economies, politics, and (most of all) health, and FOMO, fear of missing out. The result is heavy but directionless trading, alternating between gains and losses.

There is one exception however, a stock I tipped in my note Monday about Barron's recommendations published over the weekend. I collected a gaggle of ideas for buying bargains. One of them has fizzled out today because its good news is ambiguous and its bad news obvious.


*The stock I am ashamed to have backed is Santander, the Spanish bank. It re-declared for October 1 its dividend for 2019 which had been blocked in transit by the European Union in March over the corona-virus. This was greeted with olés today in Madrid where SAN gained over 3%, and by an essentially anonymous unknown outfit called Galt Research on seeking-alpha.com.

However, SAN fell 4.16% on Wall Street because of another move by the group over its Santander Chile sub, separately listed in the US. As part of the planned partial divestiture of its Latin American subs, SAN is spinning off to its Chilean sub directors services businesses there, without bidding. This kind of insider deal turns US investors off. Parent SAN today is at $1.84, an even bigger bargain than yesterday. Note that Santander B preferred shares, SAN-B, are up, meaning the problem is not about solvency or debt, but perception.

*Today both Japanese trading companies fell, Mitsubishi (MSBHF) and Sumitomo Mitsui (SMFG). Poor Buffett.

*Greencore GNCGY, the UK bank successor to our Virgin Money VRGDF, is sinking in the mire as insiders sell their shares, my worst pick in the 21st century.

Healthy stocks

*In competition with Tesla's TSLA battery day, Swiss Roche produced a huge report on its diagnostics business, RHHBY plans to double its reagents output for testing this month to 80 mn.

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