This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Three Undervalued and Overlooked Banks

In a report affirming its "market perform" rating for Comerica, equivalent to "hold," BMO Capital Markets analyst Peter Winter projected the company would repay TARP in mid-2010. He raised his guidance for 2010 to a loss of 55 cents a share (from a loss of $1.40) and net income of $2.60 in 2011.

Comerica shares are near a 52-week high, but they're selling below book value. The stock, which has risen 55% this year, has a low risk of dilution for common shareholders, especially since loan quality is improving. Based on the BMA Capital Markets earnings estimate for 2011 and Friday's closing price of $30.79, the price-to-earnings ratio would be about 12. Before the crisis began, the shares closed at $58.68 at the end of 2006, or 11 times the $5.49 per share earned that year.

After Comerica released earnings results last Tuesday, Goldman Sachs (GS) analyst Brian Foran summed up the result as "nice credit, weak earnings," saying that the company's credit quality was "the best of the bunch reporting today," which included Regions Financial (RF), Marshall & Ilsley (MI) and Zions Bancorp (ZION). Goldman has a neutral rating on Comerica.

Comerica stands out from many other regional banks because of its early improvement in credit quality. With the repayment of TARP and normalization of earnings over the next several years, there is tremendous upside potential.

Two Small Massachusetts Thrifts

The two other companies that meet our selection criteria are smaller neighboring thrift holding companies United Financial Bancorp, which had $1.25 billion in total assets as of Sept. 30, and Westfield Financial, with $1.16 billion in assets as of June 30. Westfield Financial has yet to announce third-quarter results.

3 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,010.77 +28.18 0.17%
S&P 500 1,983.86 +4.95 0.25%
NASDAQ 4,470.0340 +25.1250 0.57%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs