3SOF

Profile: Popular, Inc., through its subsidiaries, provides a range of retail and commercial banking products and services in Puerto Rico, the United States, Venezuela, and the Dominican Republic. It also provides vehicle financing, leasing, and daily rental services; mortgage loans; and insurance agency and brokerage, and reinsurance services, as well as offers financial advisory, investment, and security brokerage services for institutional and retail customers.
Market Cap: 372M
Website: http://www.popularinc.com/

Trading Thesis:

Short term speculative play, based on TA and FA.

The chart shows signals of short term upside inversion, with a consolidation backed up by strong volume.
Supports @ 1.25 and 1.00
Resistance @ 1.75 and 2.25

Fundamentals are not good yet, but are improving, I've read the last research note by B|Riley with current price target @ 2.00 and recent upgrade from neutral to Buy, this could be a nice catalyst for a short term move:

QuoteEarnings Estimates: We have adjusted our earnings model to reflect the exchange of the TARP preferred
shares to trust preferred securities and to assume the low participation scenario (we had previously assumed
the high participation scenario). The biggest change to our model is reflected in the greater common equity
resulting from the exchanges, but using the low participation scenario also means fewer new shares issued,
resulting in greater losses per share. We have changed our 2009 and 2010 EPS estimates to $(1.66) and
$(0.67), respectively, from $(1.59) and $(0.63). At the same time, projected tangible book value at June 30,
2010 has changed from $1.95 to $2.34.


Valuation and Rating: Popular stock closed at $1.30 on Wednesday. This represents 48.5% of tangible
book value (TBV). We believe Popular faces asset quality problems that will likely result in losses well
into 2010, if not for the whole year, before we start to see the company moving solidly into the black. We
also believe that Popular will emerge from this dismal period in a strong competitive position in Puerto
Rico and with a smaller, but more profitable operation on the mainland. One of our biggest concerns
regarding the stock has been the thin common equity levels. However, the significant boost to common
equity provided by the exchange offer and the Treasury's agreement to switch from preferred stock to trust
preferred securities largely relieves this concern barring a considerable further worsening of the economy.
We had been basing our price target on a 75% multiple applied to the projected TBV at June 30, 2010.
While our earnings outlook for the next year and a half has not improved, the greatly reduced possibility of
a dilutive capital raise should be reflected in a higher multiple. Consequently, we are raising the multiple
we use for our target price to 90% of TBV. Applied to the $2.34 TBV we are projecting at June 30, 2010,
this produces a $2.00 target. This target implies a 54% increase from the current price. Consequently, we
are raising our rating on shares of Popular stock to "Buy" from "Neutral".

Trading Plan:
Buy 5% @ the open, stop @ 1.15 and limit sell @ 2.20 (also include in speculative portfolio)

regards,

Sold @ 2.20 following the trading plan.