National Bank of Greece 2007-2009 Business Plan & Buy Anywhere Up to $12

National Bank of Greece (NYSE: NBG) announced their 2007-2009 business plan. The plan outlines their strategy and projections for the next 3 years.

NBG is a huge winner and I estimate this one being $13-$15 by the end of 2007 and my 3 year price target is $24-$28. Short term, NBG may come off its recent run, especially after hitting $11.24 on Friday, up 3%+ in a single day. Regardless, I am GOING DEEP on this one and am raising my slash and burn target to $12. That's right - anything under $12 is an instant buy, from both a long term and a relatively short term standpoint.
The things I like about NBG:

1. 30% Annual Income Growth
They are forecasting 30% growth in their net income each year in 2007-2009. If we can look that far out, that would be NBG is trading at about 9.1 times 2009 full year earnings, if I did the math right.

2. 24% Return on Equity
NBG is looking to significantly bump their ROE to at least 24% during this 3 year span. This is a huge jump from its current 14% ROE. How are they going to do this? Well, lots of factors come into play here. The biggest factor is their acquisition strategy. They are now well positioned in Turkey and the Balkan States. They are also looking to expand into Ukraine. NBG's growth has been driven by the retail boom in Greece the past few years, which is still strong, but is slowing somewhat. That same boom is just starting in the Balkans and Turkey and will fuel NBG's growth in the coming years. Additionally, NBG's current market penetration in these other countries is relatively small and should make it more likely that NBG can grow their presence and penetration in these countries very aggressively over the next couple of years.

3. Lots of Cash
Apart from producing lots of cash and having their margins increase, NBG has a ton of cash on hand and is not planning a special return of capital to shareholders for 2006, payable in the Spring 2007. They will most likely pay out the regular annual dividend (2%-2.5% yield), though. Last year, in the Spring 2006, NBG paid their regular dividend plus a special return of capital payment to shareholders. NBG will be holding on to their cash and pursue more acquisitions.

4. Lots of Buying
I have watched this trend since I started getting into this position. Typically, there are no more than a few hundred shares on the bid, but I have seen big blocks of shares - 10,000-50,000+ on the ask that need to be chewed away to push the stock up. Remember, it's all supply and demand. Well, so far, it has not mattered how many shares are posted for sale on the ask or at what price, they have all been bought away. There has been no indication that this trend will stop and ultimately, I think the sellers will go away before the buyers do.