At www.ValuEngine.com we show that the Finance sector 18.6% overvalued. All six in today’s table have complete ValuEngine data and have enough price data to have most value levels, risky levels and pivots.
First Niagara Financial Group, Inc. (FNFG) – has been below $10 since the week of April 7, 2012. The FDIC Quarter Banking Profile (QBP) for Q4 2012 shows that this bank has $36.9 billion in assets without any exposures to Commercial Real Estate (CRE) loans. The bank seems to have held up lending versus commitments as its CRE loans outstanding is only 36.1% of commitments, or has recently increased commitments.
Huntington Bancshares, Inc. (HBAN) – has been below $10 since the week of November 15, 2008. The FDIC QBP for Q4 2012 shows that this bank has $56.0 billion in assets without any exposures to CRE loans. The bank has a healthy 57.1% pipeline of CRE loans outstanding versus loan commitments.
Hudson City Bancorp, Inc. (HCBK) – has been below $10 since the week of April 16, 2011. The FDIC QBP for Q4 2012 shows that this bank has $40.6 billion in assets without any exposures to CRE loans.
KeyCorp (KEY) – had been below $10 since the week of November 22, 2008, but tested $10.03 last week. The FDIC QBP for Q4 2012 shows that this bank has $87.0 billion in assets without any exposures to CRE loans. The bank has a 49.9% pipeline of CRE loans outstanding versus loan commitments, which is a sign of a slightly unwillingness to lend, or has recently increased commitments.
Regions Financial Corp. (RF) – has been below $10 since the week of December 20, 2008. The FDIC QBP for Q4 2012 shows that this bank has $120.4 billion in assets without any exposures to CRE loans. The bank has a 44.4% pipeline of CRE loans outstanding versus loan commitments, which is a sign of a slightly unwillingness to lend, or has recently increased commitments.
Synovus Financial Corp. (SNV) – has been below $10 since the week of November 15, 2008. The FDIC QBP for Q4 2012 shows that this bank has $26.4 billion in assets with a slight overexposure to CRE loans. The bank has a 76.2% pipeline of CRE loans outstanding versus loan commitments, which just below the 80.0% threshold that indicates pipeline stress.
Reading the Table
OV / UN Valued – The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine. The most undervalued stock is SNV by 40.8%. The most overvalued stock is HBAN by 11.1%.
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. We have three Buy rated stocks (KEY, RF & SNV) and three hold rated stocks.
Last 12-Month Return (%) – Stocks with a Red number declined by that percentage over the last twelve months. Stocks with a Black number increased by that percentage over the past twelve months! The biggest gainer over the last twelve months is RF up 40.8%. The only loser is FNFG with a loss of 10.0%.
Forecast 1-Year Return – Stocks with a Red number are projected to decline by that percentage over the next twelve months. Stocks with a Black number in the Table are projected to move higher by that percentage over the next twelve months. These stocks are projected to trade between a gain of 2.6% and a gain of 8.0% over the next twelve months.
P/E Ratios – The twelve month trailing P/E ratios are reasonable for the five that have them.
Value Level: is the 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 acts as a magnet during the time frame noted.
Risky Level: is the price at which to enter a GTC Limit Order to sell on strength.
Where to Buy and Where to Sell
A “Value Level” is a price at which buyers should add to positions on market price weakness. A “Risky Level” is a price at which sellers should reduce holdings on market price gains. A “Pivot” is a support or resistance (Value Level or Risky Level) that was violated in its time horizon, acting as a magnet during the remainder of that time horizon. These levels are calculated in weekly (W), monthly (M), quarterly (Q), semiannual (S) and annual (A) time horizons, based on the past nine closes in each time horizon. My theory is that the closes over a nine-year period are the summation of all bullish and bearish events for that market or specific stock. These levels are the most important element of my Buy and Trade Strategy.
Buy and Trade Guidelines
Investors should consider entering good until cancelled (GTC) orders to buy weakness to a value level, or to sell strength to a risky level.
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