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

5 Cheap Bank Stocks With a Strong Earnings Future

NEW YORK ( TheStreet) -- In the midst of a bank stock rally of historical proportions, where do investors look for long-term bargains?

During the aftermath of the credit crisis -- with so many bank and thrift holding companies seeing continual pressure to earnings from loan losses and related costs -- investors and analysts have focused on price-to-book-value ratios, as an easy way of comparison.

At this point, with so many banks turning a profit, price-to-book is still useful when looking for bargains, but investors should also consider price multiples to earnings.

FIG Partners analyst John Rodis says investors should look at price multiples to 2013 earnings estimates, "because things are certainly better this year, and by 2013 you're going to have a good read on things."

Rodis says that "for better or worse, the group has been pretty strong so far this year, and the group has momentum, but on a valuation basis, for the better quality names, it is hard to justify much higher levels," adding that "it also seems that there's new money coming into the group, from institutions that were sitting on the sidelines."

According to the analyst, "prices tend to overshoot," both on the downside, and now on the upside.

Keeping in mind that most sell-side analysts focus on 12-month outlooks in their price targets, long-term investors could be well-served by focusing on the banks trading cheapest to their consensus 2013 earnings estimates.

To come up with our list, we used data supplied by HighlineFI to isolate bank and thrift stocks for which consensus 2013 earnings estimates among analysts polled by Thomson Reuters were available. We limited the group to names with average daily trading volume of at least 40,000 shares.

The list we came up with may surprise you, since it features many of the best-known U.S. banking names.

Here are the five actively traded bank stocks trading cheapest to consensus 2013 earnings estimates, ordered by descending forward price-to-earnings ratios:
1 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
DRL $0.11 0.00%
BAC $14.56 0.00%
C $46.28 0.00%
COF $72.39 0.00%
JPM $63.20 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