Growth Expert Signs up to Signature Bank

12/21/2016 7:00 am EST


Michael Cintolo

Vice President of Investments and Chief Analyst, Cabot Heritage Corporation

This featured stock isn’t a typical bank. It’s a strictly New York-based commercial bank with 30 private client offices in the NYC metropolitan area, notes growth stock expert Mike Cintolo, editor Cabot Top Ten Trader.

Signature Bank (SBNY) serves the needs of privately owned business clients, their owners and senior managers, offering business and personal banking services, plus investment, brokerage, asset management and insurance products.

The company has enjoyed years of double-digit revenue growth and has averaged over 20% growth in the first three quarters of this year.

Earnings growth, which had been steady, was dinged in Q3 by the company’s need to reserve nearly $46 million to help write down its portfolio of Chicago taxi medallion loans.

The quarterly report on October 20 gave the company’s stock a small boost, but November 9 marked a high-volume blastoff, as investors saw great potential for a New York bank with a strong niche in brokering condos and other multi-family housing units.

The possibility that having a New York real estate operator in the White House might benefit the bank may also have crossed investors’ minds. The Trump rally may be getting a little long in the tooth, but Signature Bank, which pays no dividend, should stay solid.

SBNY has been a long-term winner, but went into a significant correction after peaking at $163 in December 2015. The stock bounced a couple of times during its pullback, but wound up making a triple bottom at $114 in June, September and October.

The blastoff after the election lifted SBNY from $123 to $150 in just four trading sessions, and it has continued to push higher, recently reaching $157.

Small corrections since look normal to us. SBNY looks like an interesting speculation, and a buy anywhere around $150 seems reasonable. Use a fairly tight stop in the mid-$130s.

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