Stocks & Investing
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Fri, August 19, 2011
CMA, BAC, BBT, C, STI, KEY, Banks - Major Regional Stocks Undervalued
August 19, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Banks - Major Regional sector and these stocks are the most undervalued as of today. COMERICA INC (NYSE:CMA), BANK OF AMERICA CORPORATION (NYSE:BAC), BB&T CORP (NYSE:BBT), CITIGROUP INC (NYSE:C), SUNTRUST BANKS INC (NYSE:STI), KEYCORP (NYSE:KEY) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry
CMA COMERICA INC 23.31 41.91 44.40% Undervalued Banks - Major Regional
BAC BANK OF AMERICA CORPORATION 7.01 12.01 41.60% Undervalued Banks - Major Regional
BBT BB&T CORP 19.79 36.39 45.60% Undervalued Banks - Major Regional
C CITIGROUP INC 27.98 103.93 73.10% Undervalued Banks - Major Regional
STI SUNTRUST BANKS INC 17.71 42.56 58.40% Undervalued Banks - Major Regional
KEY KEYCORP 6.25 19.35 67.70% Undervalued Banks - Major Regional
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
COMERICA INC (NYSE:CMA) - Comerica Incorporated, through its subsidiaries, provides financial products and services in the Midwest, Western, Texas, and Florida. The companys Business Bank segment comprises middle market, commercial real estate, national dealer services, international finance, global corporate, leasing, financial services, and technology and life sciences businesses. This segment offers commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services, and loan syndication services to medium-size businesses, multinational corporations, and governmental entities. Its Retail Bank segment offers small business banking and personal financial services, including consumer lending, consumer deposit gathering, and mortgage loan origination. This segment also provides consumer products, including deposit accounts, installment loans, credit cards, student loans, home equity loans and lines of credit, and residential mortgage loans to small business customers. The companys Wealth and Institutional Management segment offers products and services consisting of fiduciary services, private banking, retirement services, investment management and advisory services, investment banking, and discount securities brokerage services. This segment also sells annuity products, as well as life, disability, and long-term care insurance products. The company was founded in 1849 and is headquartered in Dallas, Texas.
BANK OF AMERICA CORPORATION (NYSE:BAC) - Bank of America Corporation, through its subsidiaries, provides banking and financial services to individuals, small- and middle-market businesses, corporations, and governments primarily in the United States and internationally. The companys Deposits segment generates savings accounts, money market savings accounts, certificate of deposits and IRAs, and checking accounts; and Global Card Services segment provides the U.S. consumer and business card, consumer lending, international card and debit card services. Its Home Loans & Insurance segment offers fixed and adjustable-rate first-lien mortgage loans for home purchase and refinancing needs, reverse mortgages, home equity lines of credit, and home equity loans, as well as property, casualty, life, disability, and credit insurance. The companys Global Commercial Banking segment provides commercial loans and commitment facilities, real estate lending, leasing, trade finance, short-term credit, asset-based lending, and indirect consumer loans; and capital management and treasury solutions, such as treasury management, foreign exchange, and short-term investing options. Its Global Banking & Markets segment provides financial products, advisory services, financing, securities clearing, settlement, and custody services; debt and equity underwriting and distribution, merger-related advisory services, and risk management products; and integrated working capital management and treasury solutions. The companys Global Wealth & Investment Management segment offers advisory services, team-based investment advice and guidance, brokerage services, and wealth management solutions, as well as retirement services. Bank of America Corporation serves customers through a network of approximately 5,900 banking centers and 18,000 automated teller machines. The company was founded in 1874 and is based in Charlotte, North Carolina.
BB&T CORP (NYSE:BBT) - BB&T Corporation operates as the financial holding company for Branch Banking and Trust Company that provides banking and trust services to small and mid-size businesses, public agencies, local governments, and individuals in the United States. It accepts various deposit products, including noninterest-bearing checking accounts, interest-bearing checking accounts, savings accounts, money rate savings accounts, certificates of deposit, and individual retirement accounts. The companys loan portfolio includes commercial, financial, and agricultural loans; real estate construction and land development, and mortgage loans; and consumer loans. BB&T Corporation, through its other subsidiaries, offers bankcard lending, consumer finance, home equity lending, home mortgage lending, insurance, investment brokerage services, payment solutions, sales finance, small business lending, and wealth management/private banking services to retail clients; and asset management, association services, capital markets services, commercial finance, commercial middle market lending, commercial mortgage lending, institutional trust services, insurance, insurance premium finance, international banking services, leasing, merchant services, mortgage warehouse lending, real estate lending, supply chain management, and venture capital services to commercial clients. As of December 31, 2009, it operated 1,857 banking offices in North Carolina, Virginia, Florida, Georgia, Maryland, South Carolina, Alabama, Kentucky, West Virginia, Tennessee, Texas, Washington D.C., and Indiana. The company was founded in 1906 and is headquartered in Winston-Salem, North Carolina.
CITIGROUP INC (NYSE:C) - Citigroup, Inc., a global financial services company, provides consumers, corporations, governments, and institutions with a range of financial products and services. The company operates through two segments, Citicorp and Citi Holdings. The Citicorp segment operates as a global bank for businesses and consumers with two primary businesses, Regional Consumer Banking and Institutional Clients Group. The Regional Consumer Banking business provides traditional banking services, including retail banking, and branded cards in North America, Asia, Latin America, Europe, the Middle East, and Africa. The Institutional Clients Group business provides securities and banking services comprising investment banking and advisory services, lending, debt and equity sales and trading, institutional brokerage, foreign exchange, structured products, cash instruments and related derivatives, and private banking; and transaction services consisting of treasury and trade solutions, and securities and fund services. The Citi Holdings segment operates Brokerage and Asset Management, Local Consumer Lending, and Special Asset Pool businesses. The Brokerage and Asset Management Business, through its 49% stake in Morgan Stanley Smith Barney joint venture and Nikko Cordial Securities, offers retail brokerage and asset management services. The Local Consumer Lending business provides residential mortgage loans, retail partner card loans, personal loans, commercial real estate, and other consumer loans, as well as western European cards and retail banking services. The Special Asset Pool business is a portfolio of securities, loans, and other assets. Citigroup Inc. has approximately 200 million customer accounts and operates in approximately 160 countries. The company was founded in 1812 and is based in New York, New York.
SUNTRUST BANKS INC (NYSE:STI) - SunTrust Banks, Inc. operates as the holding company for SunTrust Bank, which provides various financial services to consumer and corporate customers in the United States. The companys Retail and Commercial segment offers various financial products and services that include consumer deposits, home equity lines, consumer lines, indirect auto, student lending, bank card, and other consumer loans. Its Diversified Commercial Banking segment provides commercial lending, financial risk management, capital raising, commercial card, and other treasury and payment solutions, as well as insurance premium financing and equipment and lease financing. The companys Commercial Real Estate segment offers a range of financial solutions, such as construction, mini-perm, and permanent real estate financing; and tailored financing and equity investment solutions for community development and affordable housing projects. Its Corporate and Investment Banking segment provides a line of banking services to corporate banking and institutional investor clients. This segment also offers a range of investment banking products and services, including strategic advice, capital raising, and financial risk management; and lending, leasing, treasury management, and institutional investment management services to its clients. The companys Mortgage segment provides residential mortgage products. Its Wealth and Investment Management segment offers brokerage, professional investment management, trust, family office, and investment advisor services. This segment also provides administration and custody; bundled administrative and investment; escrow; and portfolio construction and manager due diligence services. In addition, the company offers credit-related insurance, asset management, securities brokerage, and capital markets services. As of December 31, 2010, it operated 1,668 full-service banking offices. The company was founded in 1891 and is headquartered in Atlanta, Georgia.
KEYCORP (NYSE:KEY) - KeyCorp operates as a holding company for KeyBank National Association that provides various banking services in the United States. The companys Community Bank segment offers regional banking services, including deposit and investment products; personal finance services and loans comprising residential mortgages, home equity, and installment loans; deposits, investment and credit products, and business advisory services to small businesses; and financial, estate and retirement planning, and asset management services to high-net-worth clients. This segment also provides commercial banking products and services, such as commercial lending, cash management, equipment leasing, investment and employee benefit programs, succession planning, access to capital markets, and derivatives and foreign exchange to mid size businesses. Its Corporate Bank segment offers real estate capital banking services, including construction and interim lending, permanent debt placements and servicing, equity and investment banking, and other commercial banking products and services to developers, brokers, and owner-investors. This segment also provides corporate banking services comprising cash management, interest rate derivatives, and foreign exchange products and services; commercial lending, treasury management, investment banking, derivatives, foreign exchange, equity and debt underwriting and trading, and syndicated finance products and services; and equipment financing services to corporations and middle-market companies. The company also offers personal and corporate trust services, principal investing, community development financing, securities underwriting and brokerage, and merchant services. As of December 31, 2009, it operated 1,033 retail banking branches in 14 states; a telephone banking call center; and 1,531 automated teller machines in 15 states. The company was founded in 1849 and is headquartered in Cleveland, Ohio.
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