I admit that Commerce Bancshares’ (CBSH)
valuation is a puzzle to me. I appreciate the virtues of a bank with
very strong fee-generating businesses, low asset sensitivity, and strong
core operations in a challenging part of the cycle like this, but the
market seems to value that to an excessive degree in the case of
Commerce. Not that it has hurt performance, though, as these shares have
been a standout performer in the space going back as far as 15 years
(with respectable outperformance since my last update as well).
I’m
still not comfortable with the valuation, and that’s pretty much a
deal-breaker for me. But as far as investors who are/were already
comfortable with the valuation here, I don’t really see anything in the
fourth quarter results that should shift sentiment.
Commerce Clicks Off Another Quarter, But Value Is Hard To See
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