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Sandy Spring Bancorp: Better Late Than Never

Long Term Investor profile picture
Long Term Investor


  • The financial sector has enjoyed large gains over the last 18 months.
  • Sandy Spring Bancorp has had the same experience as its peers.
  • The company's valuation is very attractive.

Since President Donald Trump's election in November 2016, banking stocks have been a favorite of many. There are several macro factors contributing to this bullishness (rising interest rates, tax cuts, deregulation, etc.) which have been covered extensively on Seeking Alpha as well as in other investing communities; I will spare you from the redundancy. Whenever an industry experiences that much optimism over an extended period of time, valuations start to become frothy. While I still am bullish on the sector's prospects, some prudence and bargain hunting are required in order to maximize returns. Interestingly enough, this perspective tends to lead me away from larger national players and towards regional banks. The bullish outlook for the sector as a whole has lifted the majority of financial stocks, but there have been some a little left behind. Sandy Spring Bancorp (NASDAQ:SASR) exemplifies this, as the company's stock didn't experience outsized gains in 2017 like many of its competitors.

ChartSASR data by YCharts

SASR was "left behind" in a sense, but its valuation is quite appealing at current levels, especially given the industry average. On January 1, 2018, the company completed its acquisition of WashingtonFirst Bankshares, giving it more scale in the Mid-Atlantic United States.

Will 2018 Be The Year SASR Plays Catch-Up?

Sandy Spring's underperformance is something of an anomaly to me given the bank's operating performance over the course of the year. Below is a series of images that shows various metrics reflecting the performance of SASR. In addition to year-over-year change, a column showing the five-year CAGR for each metric was included for more historical context. Figures supporting these tables were found on Sandy Spring's Corporate Profile on SNL.com.

I find each of the figures above to be impressive and generally superior to what you'd get with most big national

This article was written by

Long Term Investor profile picture
Value-based long term investing

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in SASR over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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