Another important lesson of investing is to let your winners run. I liked Regions Financial (RF) in the midst of the pandemic-driven downturn and liked them a quarter ago, but I did shift my preference to other names that hadn’t performed quite as well. That was too early to dismount, as the shares have since run another 50%, beating the broader sector though a handful of in-region rivals like Pinnacle (PNFP) and Synovus (SNV) have done even better.
I like Regions’ rate hedges and conservative outlook on reserve releases and credit management. I also like the capital flexibility the company will have as 2021 develops (assuming credit doesn’t take a sudden downturn). Last and not least, Regions would be a digestible asset for a larger bank looking to establish a presence (or a larger presence) in the faster-growing Southeast U.S. What I don’t like so much at this point is the valuation, as Regions seems more or less fairly-valued now at a time when there are still some discounted names in the banking space.
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Regions Financial Benefiting From Hedges, And With Capital To Spare
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