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Last up on our list of Rocket Stocks this week is
SunTrust Banks(STI - Get Report), an Atlanta-based regional banking stock with around 1,700 branches spread on the Southern East coast. Regional banks have been looking increasingly attractive over the last several months, both technically and fundamentally as valuations slip and corporate profits continue to grow. Now, with much less competition for mortgage origination than there was before the recession, STI is earning bigger spreads on a higher volume of home sales.
Even though SunTrust built up massive exposure to Florida ahead of the financial crisis, the slightly better underwriting standards of regional banking firms spared STI from the performance at bigger banks. Still, the firm was one of the last names in its peer group to dig its way out of the crisis and return to consistent profitability, and that's kept investors from really piling into STI, until more recently.
Since then, SunTrust has repaid TARP, it's worked its margins back into the deep double-digits, and it's been paying out a modest dividend. With investment banking and other fee-based businesses now contributing around 40% of revenues, the firm's dependence on interest rates is lower than most peers, a very good thing in this environment.
That's why we're betting on shares of this Rocket Stock this week.
To see all of this week's Rocket Stocks in action, check out
the Rocket Stocks portfolio at Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.