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Are Bank Stocks Cheap?

|Includes: Bank of America Corporation (BAC), C, JPM, WFC

Even a day trader such as myself needs to have a good sense of market and sector valuations to correctly gauge market sentiment.  With the talk of famous hedge fund managers buying C and BAC I decided to examine some bank valuations and apparent low nominal dollar prices I decided to examine some bank valuations.
Tangible equity and return on this variable seem to provide the fairest estimate of what a bank´s normalised earnings will be. I retrieved bank tangible equity per share (TES) figure from the bank´s web sites, and applied a 20% return on tangible equity (OTC:ROTE) in the first table, and a, in my opinion, more realistic 15% ROTE in the second table. In both I combined the resulting earnings per share (NYSEARCA:EPS) with a price to earnings (NYSE:PE) ratio of nine to obtain a "fair value".

Fair Value with ROE of 20%
With the above 20% ROE, all are undervalued except for WFC. Lets use a more conservative 15% ROE and see what happens:
Fair Value with 15% ROE
We now have WFC even more overvalued, BAC and JPM are basically at fair value and C is still undervalued.

Disclosure: no positions in mentioned stocks