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!

10 Bank Stock Picks: Heroes vs. Zeros

Updated with information on BOFI's common share offering.

NEW YORK (TheStreet) -- TheStreet has revisited a list of 10 bank stock picks made over a year ago based on low price multiples to forward earnings estimates; the results are a mixed bag.

Back in September 2010, we presented a list of 10 actively traded bank stocks, with average daily trading volume of over 50,000 shares, trading at the lowest multiples to consensus 2011 earnings estimates. Out of the 10 Cheapest Bank Stocks for 2011 that were selected based on closing prices and forward earnings estimates on Sept. 3, 2010, five had brought home positive total returns through Friday's market close.

Getting five out of ten picks right over a period of a year and three months would normally be a good track record, however, three of the picks saw very significant losses for investors.

During the same time period, the KBW Bank Index (I:BKX) of large U.S. bank holding companies declined 17%.

If an investor had purchased $10,000 worth of shares in each of the 10 Cheapest Bank Stocks for 2011, the investor would have been left with $89,936 as of Friday's market close. This decline of just over 10% compares favorably to the KBW Bank Index's performance, but still hurts.

Over the past couple of years, sell-side analysts covering the largest U.S. banks have generally been "early," with buy recommendations based on historically low price multiples to book value and to forward earnings estimates. We covered this subject in detail last week, in TheStreet's 10 Bank Stocks Beating Analysts' Price Targets.

As we have seen, the enthusiasm for some of the biggest and cheapest banking names, is unabated. JPMorgan Chase (JPM), for example, is rated a buy by 23 out of 25 analysts.

Here's an update on TheStreet's original September 2010 list of 10 Cheapest Bank Stocks for 2011, once again in descending order by forward price-to-earnings ratio:

1 of 11

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 16,493.37 -69.93 -0.42%
S&P 500 1,925.15 -5.52 -0.29%
NASDAQ 4,352.6390 -17.1340 -0.39%

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