For today’s report I screened through more than 500 finance stocks that are trading below $10 but above one buck. I used FDIC data from their Quarterly Banking Profile for the second quarter of 2012. I found eight bank stocks that are trading below $10 with assets above $10 billion.
The Finance Sector is 12.6% overvalued according to www.ValuEngine.com in an overall environment where there’s a near even split between the number of undervalued stocks versus the number of overvalued stocks.
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Reading the Table
OV / UN Valued: The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. BZH is the most undervalued by 59.1%. GFA is the most overvalued by 65.7%.
VE Rating: A “1-Engine” rating is a Strong Sell, a “2-Engine” rating is a Sell, a “3-Engine” rating is a Hold, a “4-Engine” rating is a Buy and a “5-Engine” rating is a Strong Buy. <P/> 3 stocks are rated Strong Sell, 5 are rated Sell, six are rated Hold, and only one, CX, is rated Buy.
Last 12-Month Return (%): Stocks with a Red number declined by that percentage over the last twelve months. Stocks with a Black number increased by that percentage. The best performer over the past twelve months is HOV with a gain of 262.1%. The worst performer over the past twelve months is SKY with a loss of 43.2%.
Forecast 1-Year Return: Stocks with a Red number are projected to decline by that percentage over the next twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months. The best projected gain is 6.8% CX. The worst projected loss is SKY 19.6%.
P/E Ratios: Only ICA has a reasonable P/E ratio, while the others don’t have one, or the P/E ratio is extremely elevated.
Value Level: is the price at which to enter a GTC Limit Order to buy on weakness. The letters mean; W-Weekly, M-Monthly, Q-Quarterly, S-Semiannual and A- Annual.
Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.
Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.
Financial Stocks Earnings Preview:
Bank of America (BAC) reports earnings on October 17 and their EPS estimate is $.01 per share. This “too big to fail” bank has $1.65 trillion in assets, is exposed to $13.3 billion in Construction & Development loans, but their Commercial Real Estate (CRE) Pipeline (ratio of commitments funded) appears healthy.
First Bancorp. (FBP) reports earnings on October 24 and their EPS estimate is $.05 per share. This $12.9 billion bank has a healthy position in CRE loans.
First Horizon National Corporation (FHN) reports earnings on October 19 and their EPS estimate is $.18 per share. This $25.3 billion bank has a healthy position in CRE loans.
First Niagara Financial Group Inc. (FNFG) reports earnings on October 18 and their EPS estimate is $.18 per share. This $35.1 billion bank has a healthy position in CRE loans.
Huntington Bancshares Incorporated (HBAN) reports earnings on October 18 and their EPS estimate is $.17 per share. This $56.4 billion bank has a healthy position in CRE loans.
KeyCorp (KEY) reports earnings on October 18 and their EPS estimate is $.21 per share. This $84.0 billion bank has a healthy position in CRE loans.
Regions Financial Corp. (RF) reports earnings on October 23 and their EPS estimate is $.20 per share. This $121.3 billion bank has a healthy position in CRE loans.
Synovus Financial Corporation (SNV) reports earnings on October 23 and their EPS estimate is $.02 per share. This $26.0 billion bank has a minor overexposure to CRE loans, and their pipeline is 86.7% funded which is a sign of financial stress.
I have my own pricing level of buying certain stock. For me Bank of America buying range is between 5 and 7 dollars. That’s where I’ve bought all my BAC positions. And thou I understand that this is one of few stocks part of DJIA still below $10, and eventually should be at least on a dbl digits territory, still something are not comfortable for me about it.
rogianorov's position seems silly to me. bac is undervalued. the stock has outperformed all major djia bank this year -- strategically. for 2013, double-digits will be re-achieved. it went down only while the media beat it down. those days are over and bac weathered the storm plus will show trending higher y-o-y because of its strategic execution.