This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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!

Regional Banks to Write Home About

Stocks in this article: KRE IAT PJB

Although the trend in regional banks appears to be heading in the right direction, it is important to keep in mind their heavy dependency on U.S. consumer demand for loans. Granted, economic indicators are improving, illustrated by a decline in initial jobless applications and an uptick in sales of U.S. previously owned homes, and President Obama is trying to encourage lending to small businesses, but consumers continue to save more and remain reluctant to borrow.

Some ETFs that are likely to be influenced by the performance of regional banks include:

SPDR KBW Regional Banking ETF (KRE), which holds 50 different regional banks with Webster Financial Corp (WBS) as its top holding. KRE is up 38% over the last year and closed at $29.58 on Thursday.

iShares Dow Jones US Regional Banks (IAT), which holds 66 different regional banks and includes US Bancorp, PNC Financial Services Group (PNC) and BB&T Corp as its top holdings. IAT is up nearly 48% over the last year and closed at $27.12 on Thursday.

PowerShares Dynamic Banking (PJB), which holds 30 different regional banks with Fifth Third Bancorp (FITB) and M&T Bank Corp (MTB) as its top holdings. PJB is up 17% over the last year and closed at $14.52 on Thursday.

To help mitigate the heavy dependency of the sub-sector on consumer demand for loans, the use of an exit strategy that identifies price points at which upward trends in these equities could come to an end is helpful.

According to the latest data at www.SmartStops.net, the price points are as follows: BK at $30.94; BBT at $32.67; USB at $26.28; KRE at $27.00; IAT at $25.49; PJB at $13.94. These price points are reflective of market conditions and volatility and updated daily data can be found at www.SmartStops.net.

Written by Kevin Grewal in Laguna Niguel, Calif.

Kevin Grewal serves as the editorial director and research analyst at The ETF Institute, which is the only independent organization providing financial professionals with certification, education, and training pertaining to exchange-traded funds (ETFs). Additionally, he serves as the editorial director at SmartStops.net where he focuses on mitigating risks and implementing exit strategies to preserve equity. Prior to this, Grewal was an analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds a bachelor's degree from the University of California along with a MBA from the California State University, Fullerton.
2 of 2

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!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

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