Profit Fan

Pinnacle Financial Now Has To Keep Eating Its Wheaties

When you think about book value multiples, an increase in market premium is typically warranted when earnings start, or are projected, to grow at a faster rate than what the company usually produces. When I last wrote about Pinnacle Financial Partners (NASDAQ:PNFP), I had assumed that the P/TBV ratio of 2.25 reflected most of this, but apparently the market believes there is more in-store, because over the past year it has ticked up an additional 8.8% to 2.45. And, that is actually lower than the multiple that the bank commanded at the beginning of July when shares traded as high as $40.10 (P/TBV of 2.87).

When the market is on your side, there is no telling how far...

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