4. SunTrust Banks
Shares of SunTrust Banks (STI) of Atlanta closed at $23.02 Friday, returning 31% year-to-date, after a 40% decline during 2011.
The shares trade for 0.9 times their reported March 31 tangible book value of $25.49, and for nine times the consensus 2013 earnings estimate of $2.65, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $1.90.
Goldman Sachs analyst Ryan Nash has a neutral rating for SunTrust, even though he said the shares were "compelling" on June 13, saying he expects "major improvement the next few quarters" in the bank's "environmental cost" as it continues to work through problem loans and maintain and sell repossessed property. Nash also expects high refinancing volume from President Obama's expansion of the Home Affordable Refinance Program, or HARP 2.0, to "help fund near-term put-backs" of securitized mortgage loans.HARP 2.0 allows mortgage loan borrowers with loans held by Fannie Mae (FNMA) or Freddie Mac (FMCC) to refinance their homes at today's historically low rates, no matter how much the value of the collateral property has declined. Nash reiterated his neutral rating for SunTrust because "put-backs remain unpredictable," while saying that his firm's "analysis sees $800mn of further put-back losses," while SunTrust has estimated another $600 million in mortgage repurchase losses. In support of the neutral rating, the analyst also cited "outsize margin pressure," expecting SunTrust's net interest margin to compress by 27 basis points, versus "consensus of 13bp." Interested in more on SunTrust? See TheStreet Ratings' report card for this stock.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV