Will Bank Stocks be the Next Hot Stocks? - a podcast by Zacks Investment Research

Welcome to Episode #7 of the Value Investor Podcast

Every week, Zacks value stock strategist and the Editor of Zacks Value Investor portfolio service, Tracey Ryniec, talks about all things happening in the value stock universe, including her top stock picks.

This week, Tracey discusses the banks. They have been ignored by investors since the Great Recession but that’s why they are a value opportunity.

While there are things to like about the big banks, like Bank of America (BAC) and Citigroup (C), Tracey is an even bigger fan of the smaller regional banks. They range in size from $100 million to $2 billion in market cap and focus on general banking activities like mortgages, small business loans, construction loans, and deposits.

Despite low interest rates, mortgage originations are strong and bank assets are, in general, rising.

3 Regional Banks to Buy Now
There are dozens of regional banks with Zacks Ranks of #1 (Strong Buy) or #2 (Buy) which investors can research further. Tracey narrowed down the list to these 3 regional banks with market caps ranging from $170 million to $1.5 billion.
1. Central Valley Community Bancorp (CVCY) in California: Forward P/E of 11.6 and pays a dividend yielding 1.6%.
2. HomeStreet, Inc. (HMST) in Seattle: Forward P/E of 10.2
3. Flagstar Bancorp (FBC) in Troy, Michigan: Forward P/E of 11.8

Be sure to understand the underlying business community before you invest. For example, the Texas banks may develop problems with loans to the oil and gas industry. You might want to be in banks in a part of the United States that doesn’t have exposure to the energy industry.

Bank stocks may seem boring, but as we’ve seen, growth can be found in a variety of places. It’s not the sole domain of the technology or social media stocks.

Find out why Tracey thinks the banks are the next big thing and more on this week’s podcast.

Flagstar Bank: https://www.zacks.com/stock/quote/FBC?cid=cs-soundcloud-ft-pod
Central Valley Community: https://www.zacks.com/stock/quote/CVCY?cid=cs-soundcloud-ft-pod
Homestreet Inc: https://www.zacks.com/stock/quote/HMST?cid=cs-soundcloud-ft-pod
Bank of America: https://www.zacks.com/stock/quote/BAC?cid=cs-soundcloud-ft-pod
Citi: https://www.zacks.com/stock/quote/C?cid=cs-soundcloud-ft-pod

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