Sunday, March 13, 2016

Seeking Alpha: Fifth Third Undervalued, But Where's The Spark?

Reduced prospects for further rate hikes and incrementally greater concerns over credit quality hasn't been good for the banking sector as a whole, but Fifth Third (NASDAQ:FITB) has suffered a little more than average. The shares are down more than 20% since my last update in the summer of 2015, underperforming the S&P Regional Banking ETF (NYSEARCA:KRE) by more than 5%, as well as trailing peers/rivals like PNC (NYSE:PNC), JPMorgan (NYSE:JPM), U.S. Bancorp (NYSE:USB) by slightly larger amounts.

I'm a little concerned about Fifth Third's lackluster performance on net interest margin and expenses, as well as what could prove to be somewhat aggressive reserving should credit quality reverse. None of this leads me to think that Fifth Third is a bad bank, but I find it hard to come up with a reason to own Fifth Third over JPMorgan, BB&T (NYSE:BBT), or Wells Fargo (NYSE:WFC) given what seems to me to be similar levels of undervaluation but fewer drivers for outperformance.

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Fifth Third Undervalued, But Where's The Spark?

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