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One way to minimize risk when considering financial stocks is to identify well-managed financial companies. A sound financial company has maintained profitability despite ups and downs in the market. In our list today we chose financial companies that have weathered the storms, while taking a particular focus on those that are rated as undervalued using an additional screen. These companies are worth further investigation.

The Price/Book Value Ratio is a great price-multiple valuation metric to find companies that could be potentially undervalued or overvalued. If a company has a Price/Book Value Ratio of less than 1 it is stated to be trading below break up value. A lower P/BV Ratio can indicate a potentially mispriced company or indicate that something is fundamentally wrong with it.

The Price/Earnings ratio is one of the most commonly used price-multiple metrics. Often, EPS from the last four quarters is used to derive this number. A company that has a high P/E ratio generally indicates that investors have high expectations of the firm relative to future earnings growth. By the opposite token, investors generally have lower expectations of a company with a low P/E ratio. A company that holds a P/E below 10 could be viewed as having "value investment" potential. One thing to remember is that EPS is an accounting measure that could be potentially manipulated. Thus the P/E is only as good as the quality of the earnings.

The Operating Profit Margin is a profitability ratio that measures the effectiveness of the company's operating efficiency. This metric allows investors to see how much profit is left after all variable costs are covered. If the company's margin is increasing over time, this means that it's earning more per dollar of sales. Finding trends in the Operating Profit Margin helps investors identify companies that are improving profitability over time and managing the economic landscape better than competitors.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.

We first looked for financial stocks. We then looked for companies that are undervalued (P/BV<1)(P/E<10). From here, we then looked for companies with strong profit margins (1-year operating margin>15%)(1-year fiscal EPS growth rate>10%). We did not screen out any market caps.

Do you think these stocks offer both value and growth? Use our list to help with your own analysis.

1) Hanmi Financial Corporation (NASDAQ:HAFC)

Sector:Financial
Industry:Regional - Pacific Banks
Market Cap:$341.35M
Beta:1.52

Hanmi Financial Corporation has a Price/Book Value Ratio of 0.98, a Price/Earnings Ratio of 4.42, an Operating Profit Margin of 21.02%, and an Earnings Per Share Growth Rate of 118.46%. The short interest was 3.60% as of July 23, 2012. Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. Its deposit product line comprises business and personal checking accounts, savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit.

The company's loan portfolio includes real estate loans, such as commercial property, construction, and residential property loans; commercial and industrial loans comprising commercial term loans, commercial lines of credit, small business administration loans, and international trade finance; and consumer loans consisting of automobile loans, secured and unsecured personal loans, home improvement loans, home equity lines of credit, overdraft protection loans, and unsecured lines of credit and credit cards.

2) Horizon Bancorp (NASDAQ:HBNC)

Sector:Financial
Industry:Regional - Northeast Banks
Market Cap:$131.00M
Beta:0.76

Horizon Bancorp has a Price/Book Value Ratio of 0.99, a Price/Earnings Ratio of 8.65, an Operating Profit Margin of 30.80%, and an Earnings Per Share Growth Rate of 25.35%. The short interest was 5.75% as of July 23, 2012. Horizon Bancorp operates as the bank holding company for Horizon Bank, N.A. that provides commercial and retail banking services in northwestern Indiana and southwestern Michigan. The company offers demand deposits, savings accounts, interest-bearing checking accounts, and money market deposits.

3) Banco Latinoamericano De Comercio Exterior, S.A. (NYSE:BLX)

Sector:Financial
Industry:Foreign Money Center Banks
Market Cap:$773.05M
Beta:1.21

Banco Latinoamericano De Comercio Exterior, S.A. has a Price/Book Value Ratio of 0.97, a Price/Earnings Ratio of 8.10, an Operating Profit Margin of 62.53%, and an Earnings Per Share Growth Rate of 95.15%. The short interest was 4.77% as of July 23, 2012. Banco Latinoamericano De Comercio Exterior, S.A. provides trade financing to commercial banks, middle-market companies, and corporations primarily in Latin America and the Caribbean. The company operates through three divisions: Commercial, Treasury, and Asset Management.

4) Berkshire Bancorp, Inc. (NASDAQ:BERK)

Sector:Financial
Industry:Regional - Northeast Banks
Market Cap:$121.58M
Beta:0.80

This company has a Price/Book Value Ratio of 0.98, a Price/Earnings Ratio of 1.30, an Operating Profit Margin of 74.95%, and an Earnings Per Share Growth Rate of 312.70%. The short interest was 5.50% as of July 23, 2012. Berkshire Bancorp, Inc. operates as the bank holding company for The Berkshire Bank that provides community banking services to businesses, professionals, and retail customers primarily in New York City metropolitan area and the Villages of Goshen and Harriman. The company offers various deposit products, including statement savings accounts, NOW accounts, money market deposits accounts, checking accounts, time deposits, and certificates of deposit.

5) Century BanCorp, Inc. (NASDAQ:CNBKA)

Sector:Financial
Industry:Regional - Northeast Banks
Market Cap:$169.83M
Beta:0.32

Century Bancorp, Inc. has a Price/Book Value Ratio of 0.99, a Price/Earnings Ratio of 9.78, an Operating Profit Margin of 25.58%, and an Earnings Per Share Growth Rate of 22.84%. The short interest was 3.26% as of July 23, 2012. Century Bancorp, Inc. operates as the bank holding company for Century Bank and Trust Company, which provides banking products and services to commercial enterprises, state and local governments and agencies, nonprofit organizations, and individuals in Massachusetts.

It offers various deposit products, including savings accounts, NOW accounts, demand deposits, time deposits, and money market accounts. The company also offers single and multi-family residential loans, commercial and industrial loans, commercial real estate loans, construction loans, home equity loans, and consumer loans.

6) Enterprise Financial Services Corporation (NASDAQ:EFSC)

Sector:Financial
Industry:Regional - Southwest Banks
Market Cap:$209.32M
Beta:0.79

Enterprise Financial Services Corporation has a Price/Book Value Ratio of 0.98, a Price/Earnings Ratio of 8.57, an Operating Profit Margin of 29.33%, and an Earnings Per Share Growth Rate of 538.04%. The short interest was 3.59% as of July 23, 2012. Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that provides banking and wealth management services to individuals and business customers located in the St. Louis, Kansas City, and Phoenix metropolitan markets.

It accepts various deposit products that include interest-bearing transaction accounts and demand deposits, money market accounts, savings accounts, certificates of deposit, and non interest-bearing demand deposits. The company's loan portfolio comprises commercial and industrial, commercial real estate, real estate construction and development, residential real estate, and consumer loans.

*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.

Source: 6 Undervalued Financial Stocks On Track For Strong Growth