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Dr. Kris has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her satisfaction), she decided to tackle something even more difficult—the stock market. Applying the scientific method along with an insatiably... More
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  • Market Notes: Putting Money Into Regional Banks -- June 25 0 comments
    Jun 25, 2013 5:32 PM | about stocks: CFR, COLB, EWBC, HOMB, IBKC, INDB, PACW, SBNY, WAFD, WAL, WSBC

    The market followed through on yesterday's bounce but methinks this rally is likely to be short-lived. Despite today's 8% drop in the VIX, it was unable to close under 18 which is proving to be a sturdy level of support. Also, the drop in the Trin to near contrarian levels in intraday trading suggests that the bulls are quickly running out of steam. We could get a rally on tomorrow's open but it wouldn't be a surprise if that quickly fizzled.

    Today's Market Highlights: Regional banks continue to shine
    In yesterday's blog we noted the rally in regional banks due to the favorable impact of a rising interest rate environment. The party continued today with a rash of banks breaking out to new highs: Cullen Frost Bank (CFR, $66), Columbia Bank (COLB, $23), East West Bancorp (EWBC, $27), Home Bancshares (HOMB, $23), Iberia Bank (IBKC, $54), Independent Bank (INDB, $34), PacWest Bancorp (PACW, $30), Signature Bank (SBNY, $82), Washington Fed (WAFD, $18), Western Alliance (WAL, $15), and Wesbanco (WSBC, $26).

    Regional banks are one of the very few industry groups that are poised to do well in a rising interest rate environment and with P/E's still fairly low (most of the above are in the 13 - 19 range) now is the time to get in on the action. On top of that, many of them pay a dividend (typically in the 1-3% range). If profits expand as expected, dividends could increase making these banks even more attractive. If you're looking for a place to park some cash, I'd suggest that you strongly consider this industry group--but do your own research before investing!

    Subscriber Notes: There is one new Channeling Stock. Also note that the Channeling Stocks database has been updated.

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