Small-Cap Stars: Regional Banks Shining Bright

Michael Teague |

Investors who are serious about making big returns on their equity investments will inevitably have to devote a significant amount of time to sifting through the small-caps, a task that requires the ability to assess  and balance the considerably greater risks against the prospects for considerably greater growth.

In terms of the financial sector, however, small-caps may soon become far more attractive vehicles than their larger peers, who going forward look to be facing a far more burdensome regulatory environment. Five years after the eruption of the global financial crisis, the world’s major financial institutions are faced with an increasingly serious public-relations problem resulting from recent record settlement payouts, forced admissions of guilt, and a regulatory environment intent on increasing capital requirements.

With these considerations in mind, investors may want to look into small-cap financial stocks, and those of regional banks in particular. Indeed, these commercial banking institutions are generally more immune to the temptations and potential ravages of overleveraging. And in terms of performance, 2013 has been a good year for regionals, with the 2013 return on the SPDR S&P Regional Banking ETF ($KRE) currently just under 38 percent to $37.75 per share.

These considerations make the recent-unveiling of Equities.com’s Small-Cap Stars series all the more timely. Our analysts have been hard at work formulating a methodology by which to locate the best stocks according to the fundamental data most pertinent to each sector of the economy (a full elaboration of the methodology can be found here).

For the time being, readers need only consider the fact that some of the the top-rated and best-performing financial stocks according to our Small-Cap Stars screener are from the regional banking industry. The following regional bank stocks garnered a 5-star rating from our screening methodology:


 

Firstbank Corporation (FBMI) -
Region: Midwest

Market-Cap: $158.38 million

Price: $19.59

Year-to-Date Return: +85.28 percent

 

Pinnacle Financial Partners Inc. (PNFP) -

Region: Southeast

Market-Cap: $1.07 billion

Price: $31.10

Year-to-Date Return: +66.56 percent

 

Orrstown Financial Services Inc. (ORRF) -

Region: Northeast

Market-Cap: $128.73 million

Price: $15.98

Year-to-Date Return: +65.04 percent

 

Newbridge Bancorp (NBBC) -

Region: Mid-Atlantic

Market-Cap: $212.33 million

Price: $7.62

Year-to-Date Return: +61.12 percent

 

Southwest Bancorp (OKSB) -

Region: Southwest

Market-Cap: $316.65 million

Price: $16.02

Year-to-Date Return: +43.57 percent

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ORRF Orrstown Financial Services Inc 21.10 -0.85 -3.87 8,019
PNFP Pinnacle Financial Partners Inc. 65.95 -0.10 -0.15 167,366
NBBC NewBridge Bancorp n/a n/a n/a 0
AMANF Amano Corp. 14.07 0.00 0.00 0

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