These financials really are hideous. They are caught right now, getting no credit for not having bad credits, getting crushed if they do -- and many do, stemming from oil loans -- and they don't even go higher if everything's good.
Tonight I took a hard look at First Horizon (FHN) and spoke to CEO Bryan Jordan, and it was amazing how even after a pretty darned good quarter with some nice loan growth, good share take and a robust area -- think First Tennessee Bancorp and all of the hot markets within it -- this stock can't get out of its own way.
It had elevated expenses, but I think they are one time only. It has a commercial business in Texas but doesn't have many oil loans to speak of, and it is growing.
But it has three strikes against it: 1) Fund managers only seem to want the banks if the Fed is going to raise aggressively, which is hard given the newfound weak data; 2) there's no real dividend to speak of, and if we are going to own deep value, we want a dividend; and 3) these stocks all trade together like one big ETF, so it doesn't matter how hard this bank works at making money, the groupthink crushes it.
I think this a cheap regional bank that if there wasn't so much concentration in banking in this country would have been snapped up. Given its footprint and its clean balance sheet with so few bad loans, it would be a natural for it to be bought by another bank.
That's highly unlikely given that the natural acquirers like Bank of America (BAC), JPMorgan (JPM) and Wells Fargo (WFC) have way too much concentration as it is. (Bank of America and Wells Fargo are part of TheStreet's Action Alerts PLUS portfolio.)
So First Horizon's stock just kind of sits there and you have to be patient, but who's patient these days?