Trying to figure out why any particular stock underperforms over the short term can be an exercise in utter frustration. Sure, sometimes there are obvious drivers (earnings misses, clear deterioration in market fundamentals, et al), but other times there’s no easy go-to explanation. Such would seem to be the case for East West Bancorp (EWBC) - the business is performing well and I don’t see many fundamental issues in the bank’s served markets.
I continue to believe that East West offers attractive long-term upside, as this affinity-based bank continues to grow its high-quality loan book and leverage an attractive deposit base, as well as growth in U.S.-China trade. I do think the company will encounter more loan competition as it grows (and targets larger customers / loan amounts), but that risk seems more than reflected in the share price, and this looks to me like a relatively rare bank stock that offers high single-digit long-term core growth (or better) at a reasonable valuation.
Continue reading here:
East West Bancorp Undervalued On Above-Average Loan Growth And Core Earnings Growth Potential
No comments:
Post a Comment