This Day On The Street
Continue to site
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

Five Bank Stock Bargains

3. Oriental Financial Group (OFG - Get Report) of San Juan, P.R., purchased the failed Eurobank, also of San Juan, from the FDIC on April 30. The acquisition included 22 branches, $785 million in retail deposits and $1.7 billion in assets, with the FDIC agreeing to absorb 80% of losses on acquired loans. The transaction grew Oriental's balance sheet 26% to roughly $8.2 billion.

Oriental also raised $200 million in a preferred share offering, with the shares subject to mandatory conversion to common stock, pending shareholder approval.

Sterne Agee analyst Adam Barkstrom estimates that after the conversion, Oriental's tangible book value will be $12.60 per common share. Shares closed at $13.25 Tuesday, down 21% in May, but up 23% year to date.

Barkstrom said on May 3 that the shares were "fairly valued" at $16.72, or roughly 10 times Sterne Agee's "normalized" earnings estimate of $1.70. With shares dropping so much since that report was published and selling for just six times the 2011 consensus earnings estimate of $1.88 among analysts polled by Thomson First Call, Oriental Financial looks like a bargain.

Oriental Financial has stood out among Puerto Rico banks through the real estate crisis, with the best credit quality by far, with a nonperforming assets ratio staying well below 2.5%, and very light loan losses. The company's low-risk acquisition of Eurobank has positioned itself for growth when the Puerto Rico economy recovers, and because the capital raise is behind it, patient investors should be rewarded.
4 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BKMU $8.08 0.00%
FFIC $19.95 0.00%
NWBI $14.02 0.00%
OFG $8.83 0.00%
WFD $7.66 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs