• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Financial Services

3 Regional Banks Have a Nice Price

They would benefit if Fed raises rates.
By JOHN REESE
Nov 19, 2015 | 08:00 AM EST
Stocks quotes in this article: KRE, TCBK, HOMB, STBA

My stock recommendations come from computerized strategies I created that mirror how a dozen or so Wall Street greats invest. When a particular industry has a number of stocks earning recommendations, I know that is an industry worth looking at closely.

Right now, such an industry is regional banks. These financial institutions are buffeted from international economic weakness, such as from China and the European Union, because they focus on local and regional markets. They are also in a position to benefit when the Federal Reserve raises interest rates, a likely scenario during the next several months and, perhaps, as soon as next month. In addition, year-to-date, SPDR S&P Regional Banking ETF (KRE) has enjoyed a 6.54% return, vs. the S&P 500's 0.69%.

Let me tell you about three regional banks with somewhat small market caps. All are recommended by my Peter Lynch-based strategy, which emphasizes the P/E/G ratio, which is price-to-earnings relative to growth, and is a measure of how much the investor is paying for growth. The maximum P/E/G allowed is 1.0. Stocks that earn this strategy's recommendation are particularly well priced.

TriCo Bancshares (TCBK): Operating as Tri Counties Bank, TriCo, headquartered in Chico, Calif., operates 67 branches in Northern and Central California. Its market cap is about $640 million and its P/E/G is a strong 0.76. With financial institutions, the Lynch strategy also considers the amount of assets relative to equity, and it wants assets to be at least 5% of equity; TriCo's assets are more than double this minimum at 11%.

Home BancShares (HOMB): Operates under Centennial Bank moniker in Arkansas, Florida and south Alabama, via a network of 151 branches. Headquartered in Conway, Ark., the bank's market cap is $3.1 billion, while its P/E/G is 0.64 and equity is 13% of assets.

S&T Bancorp (STBA): Operating primarily in south-central and southwest Pennsylvania, S&T, based in Indiana, Pa., has a market cap of $1.2 billion and operates from about 58 branches. Its stock has a very favorable P/E/G of 0.44 and equity equals 13% of assets.

Strong performers with well-priced stocks, these three regional banks are certainly worth considering adding to your portfolio.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Reese was long TCBK and HOMB, although positions may change at any time.

TAGS: Investing | U.S. Equity | Financial Services

More from Financial Services

American Express Tells Tale of 2 Trends Ahead of Earnings

Bruce Kamich
Jan 26, 2023 9:24 AM EST

The credit card giant's charts present a mixed picture in advance of its fourth-quarter results on Friday.

Glimmers of Hope, Debt Limit Farce, Netflix Narrative, Strapped Consumers?

Stephen Guilfoyle
Jan 20, 2023 7:53 AM EST

Plus, a bird's-eye view of which direction the S&P 500 Index could take from here.

There's Nothing Pretty About Volatile Goldman Sachs: Here's What to Watch For

Stephen Guilfoyle
Jan 17, 2023 10:25 AM EST

We have thought GS cheap for years. While the stock rallied significantly into mid-year 2021, it has done little since.

How to Trade Goldman Sachs as Shares Sell Off After Earnings

Bruce Kamich
Jan 17, 2023 9:22 AM EST

Let's see how deep this downward reaction may extend.

Bank of America: Why I'm Buying the Dip 'Ahead of the Storm'

Stephen Guilfoyle
Jan 13, 2023 10:45 AM EST

The size of provisions are scaring Wall Street a little right now.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 03:06 PM EST BOB LANG

    LEAPS Webinar

    This week, I offered a free webinar session talkin...
  • 02:53 PM EST REAL MONEY

    LIVE EVENT: Chris Versace and "Sarge" Guilfoyle Share Their Stock Market Insights

    This Monday, Jan. 30, at 12 p.m., our very own exp...
  • 04:58 PM EST REAL MONEY

    The Latest AAP Podcast!

    Listen in as AAP Tackles Earnings, the Fed, Recess...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login