While I thought Zions Bancorporation (NASDAQ:ZION) was meaningfully undervalued relative to its long-term earnings-based fair value after first quarter results, I also thought that was true of a lot of banks, and I didn't see a lot of places where Zions stood out positively. That's particularly true, given the bank's asset sensitivity, comparative lack of fee-generating businesses, and concerns about how effectively it has repositioned its loan book since the last downturn.
Since that last write-up, the shares have basically tracked its peer group and just slightly underperformed the S&P 500, so I don't feel like investors have missed all that much. Zions had a decent enough second quarter, but I'm still concerned about the level of reserves and the fact that Zions isn't really built to thrive in this low-rate part of the cycle. The long-term value is still significant, though, and the dividend yield is decent, so I can definitely understand why some value-oriented investors may be tempted to buy and wait. I don't dislike Zions here, but I think there are better names out there.
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