NEW YORK (
) -- The banking sector has had a wild ride this year, and now that third-quarter results are in for most of the nation's largest players,
has identified a select list of actively traded names with significant upside, based on consensus price targets.
Of course, a consensus price target could be based on a relatively small number of buy ratings among analysts, so we have limited our selections to names with at least half the analysts rating the shares a buy.
This approach excludes some well-known banking names, including
Bank of America
(BAC - Get Report)
, which closed at $6.72 Monday, and had 46% upside based on the mean 12-month price target of $9.83, among analysts polled by FactSet. Out of 23 analysts covering Bank of America, only nine rate the shares a buy.
We also limited our selection to bank stocks with average daily trading volume of over 50,000 shares. Data was provided by SNL Financial.
KBW Bank Index
was down 25% year-to-date through Monday's close at 39.23. With hundreds of bank stocks trading below book value and profitable names trading at historically low levels to forward earnings estimates, bargains abound for patient investors confident about economic recovery.
FBR Capital Markets analyst Paul Miller said that the industry's third-quarter results have many banks "setting up well for year-end," and that "some of the dire scenarios discussed may have hit bank valuations harder than underlying fundamentals indicate." Miller added that "the banks were able to show decent loan growth in select asset classes, net interest income looks to be more resilient than expected, and credit has continued to improve," and that he was "incrementally more positive on bank stocks going into the end of the year."
Of course, even when we pare the list to only include bank stocks with at least half the analysts rating the shares a buy, we are including some risky names here. Read on for the details.
10 bank stocks
with up to 102% upside: