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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