Trading is not a game of exacts. Perfectionists need not apply. Markets are made up of many irration...
Fun in the Sun: Bank on Florida
11/21/2003 12:00 am EST
Perhaps we're slightly biased as we, at The Money Show, live and work in Florida. But there is no doubt that many of Florida's coastal communities are both prosperous and growing. One group of stocks that have benefited from this growth are the regional banks in the area. Here are three plays on the Treasure Coast. (For more information on any of the advisors cited below, please click on their photos.)
"Intervest Bancshares (IBCA NASDAQ) is a nationally chartered bank with five full-service offices in Clearwater and Pinellas County, Florida," notes Doug Hughes, the leading authority on small bank stocks, in his aptly namedSmall Bank Newsletter . "These guys know how to run a bank. They are located in all the right markets and a bank of this size can continue to steal market share from the big boys. Their growth opportunities going forward are still great. Management is smart and owns most of the stock. We can look forward to strong stock appreciation over the next several years. They have a book value of $12.61 a share and should earn $2.25+ a share in 2004. We estimate that earnings will grow at about 17% per year. With a P/E of 6 it is hard to find a value like this in this market. Look for management to make this bank a mini powerhouse over the next several years. Accumulate under $13.15 and buy all you can under $12.50. Downside risk should be limited to around 10%, even if we get a hard correction in this sector. We believe a sale of the bank is now closer. The stock is worth at least $28 a share 3-4 years out, in a deal. This investment is for long-term investors only."
"Harbor Florida Bancshares (HARB NASDAQ) is a small-company stock with strong performance and value fundamentals," says Richard Moroney, editor of Upside, which specializes in low-priced growth issues. "We think it provides a winning combination of growth and yield. Harbor Florida is headquartered in Fort Pierce and operates 34 branches in St. Lucie, Indian River, and Martin counties, located on Florida's prosperous Treasure Coast. The thrift is one of the most profitable in the state, boasting top-notch returns on assets and efficiency ratios. A strong local real estate market has allowed Harbor to deliver healthy loan growth without sacrificing quality. In the latest quarter, the bank posted per-share earnings of $0.42, up 14%. Total assets increased 12% to $2.4 billion. Asset quality remains excellent. Harbor is rated as a Best Buy."
"F.N.B. Corp. (FBAN NASDAQ) is a diversified financial services firms and the largest bank holding company headquartered in Florida," notes Richard Young, editor of Intelligence Report and resident of Naples, Florida, where F.N.B. Is headquartered. "Today, F.N.B. Corp. includes both Pennsylvania and Florida businesses, but it will split in two. By early next year, F.N.B. will spin off a newly named company whose lead subsidiary will be First National Bank of Florida, headquartered in sunny Naples. In our opinion, Naples is one of the primo growth markets in the US. A new bank holding company will be established. It is contemplated that shareholders will receive one share of common stock in a newly formed Florida holding company for each share owned in FBAN. My strategy is to continue to buy shares in FBAN, hold the shares of the new yet-to-be-named Florida company that will be spun off, and then sell the remaining F.N.B, which will become strictly a Pennsylvania operation."
The key risk-on and off drivers today are the same – U.S. politics, global growth, other centr...