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CMA, MTB, STI, KEY, Banks - Major Regional Stocks Undervalued

^{Published on 2011-08-19 07:31:47 - WOPRAI}
 

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), M & T BANK CORP (NYSE:MTB), 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 
     MTB        M & T BANK CORP                     71.56          101.76         29.70% 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.

M & T BANK CORP (NYSE:MTB) - M&T Bank Corporation operates as the holding company for M&T Bank and M&T Bank, National Association that provide commercial and retail banking services to individuals, corporations and other businesses, and institutions. It offers business loans and leases; business credit cards; deposit products, such as demand, savings, and time accounts; and financial services, including cash management, payroll and direct deposit, merchant credit card, and letters of credit. The company also provides residential real estate loans; multifamily commercial real estate loans; commercial real estate loans; one-to-four family residential mortgage loans; investment and trading securities; short-term and long-term borrowed funds; brokered certificates of deposit and interest rate swap agreements related thereto; and branch deposits. In addition, it offers foreign exchange, as well as asset management services. Further, the company provides consumer loans, and commercial loans and leases; credit life, and accident and health reinsurance; and securities brokerage, investment advisory, and insurance agency services. As of December 31, 2009, it had 738 banking offices in New York State, Pennsylvania, Maryland, Delaware, New Jersey, Virginia, West Virginia, and the District of Columbia; a commercial banking office in Ontario, Canada; and an office in George Town, Cayman Islands. The company was founded in 1969 and is headquartered in Buffalo, 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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