Have Some Northern Exposure - Barron's

At a time when most of the banking industry has been battered by the housing and credit crises, Barron's says Northern Trust has emerged as the picture of stability, noting that just 0.12% of its loans are classified as non-performing vs. 0.76% for the banks as a whole. Shares of the high-end bank, which caters to some of the Midwest's wealthiest families, have jumped 19% over the past six months as it saw earnings climb 26% in the third quarter, while the KBW index of major banks has slid 11%. Though the stock isn't cheap at some 19x earnings, analysts say there is still room to run given strong demand for private banking and institutional financial services and the fact that the shares are trading at a discount to its long-term average P/E ratio of 24.5. In fact, Barron's says the shares could easily add 10% or more annually in the coming years as it builds upon its business of catering to the super-rich as the pool of millionaires and multi-millionaires around the world swells.

Sources: Barron's
Commentary: Investment Styles of the Rich and Famous
Stocks to watch: NTRS. Competitors: BK, STT, BAC. ETFs: KRE, RKH, IAT
Earnings call transcript: Northern Trust Q3 2007

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