Third quarter results highlight yet again that Commerce Bancshares' (CBSH) premium valuation isn't without merit, as the bank once again leveraged its low-cost deposit base and differentiated business mix to deliver better results than its peer group. Commerce remains flush with capital that can be deployed into growth M&A, while the credit situation remains very good.
Interest in the banking sector has picked up a bit in recent months, and with a slight shift toward "risk on", Commerce has lagged the sector a bit since my last update. Perception and sentiment remain the biggest risks I see here. Commerce is thought of as a very high-quality conservative bank, and it tends to outperform in the bad times, but I'm increasingly of the mind that the bank's underlying long-term growth potential has been underappreciated (myself included). Should Commerce be left behind in a "flight from quality" when investor interest returns to banks, this would definitely be a name to revisit.
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Commerce Bancshares Delivers Better Results From Its Strong Balance Sheet And Business Mix
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