Community Bank Stocks Are Overvalued, Overbought
A major point that I will be making to the Florida bankers present is that 60% of the 213 FDIC-insured financial institutions headquartered in Florida are still overexposed to commercial real estate loans. This is significant as nationally only 23.9% of all banks have over-exposures to CRE loans.
Reading the Table
OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy. Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage. Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months. Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual. Pivot: A level between a value level and risky level that should be a magnet during the time frame noted. Risky Level: Price at which to enter a GTC limit order to sell on strength. The Florida publicly traded bank in today's table is Centerstate Banks (CSFL), ($8.71) which has a buy rating and is 37.4% undervalued. The weekly chart profile is positive but overbought with the five-week modified moving average at $8.60. CSFL began 2012 slightly overexposed to CRE loans, but that ended in Q2 2012. CSFL has an elevated pipeline with 91.9% of its real estate loans fully funded. My semiannual value level is $7.13 with a monthly pivot at $9.37 vs. its Sept. 19 high at $9.22. My annual risky level is $14.26. At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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