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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