Thursday, July 23, 2015

Seeking Alpha: Fifth Third Catches Up To The Pack

Like Wilshire Bancorp (NASDAQ:WIBC), I thought Fifth Third (NASDAQ:FITB) offered investors some interesting and attractive value back in January of this year. Like in the case of Wilshire, I thought that investors would have to have some patience to see the Street come around and recognize that value given a less-exciting outlook for loan growth and interest spread improvement. And like in the case of Wilshire, I was wrong about the timing - the shares rose almost 25% since that piece, very nearly making it the best performer in its weight class (just edged out by Key (NYSE:KEY), but Regions Financial (NYSE:RF) is very close behind).

I'd just as soon see my performance come sooner than later, so I'm not complaining that Fifth Third has gotten the recognition I thought it was due. Looking ahead, though, here again we have another story where the future returns are likely to be more traditionally "bank-like", with future rate hikes, expansion of fee-generating businesses, and expense reductions as the primary performance drivers. Given better valuation I'd lean more toward U.S. Bancorp (NYSE:USB) today with new money (or banks outside the U.S.), but Fifth Third isn't overvalued today and can still generate a decent return from here.

Read more:
Fifth Third Catches Up To The Pack

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