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Sector Watch: Banks - Regionals Merge on Low, Held by Billionaires

November 04, 2013 | About:
Sally Jones

Sally Jones

49 followers
The banking sector in the U.S. is still the industry with the most 52-week lows. Banking currently has 54 out of 627 companies on a 52-week low. The low ratio is 0.09.

A few billionaire investors hold today’s featured regional banking companies that are merging with other regional banks to strengthen themselves and to expand their reach: Cascade Bancorp (CACB) and HomeStreet Inc. (HMST), as revealed by the GuruFocus 52-week low screener, are more than 29% off a 52-week high. Down 25% since January, Cascade Bancorp recently announced its merger with Home Federal Bancorp (HOME), expanding their combined reach in Oregon and Idaho. While HomeStreet Inc. is down 28% since January, the banking company just acquired two more banks that will significantly expand its retail deposit branches in Washington, Oregon and Hawaii.

U.S. Sector: Banking

Highlight: HomeStreet Inc. (HMST)

The HMST share price is around $18.63 or 35.2% off the 52-week high of $28.73. Its yield is 2.50%. Its dividend yield is 1.20%.

Down 20% over 12 months, HomeStreet Inc.has a market cap of $271.5 million and is traded at a P/E of 5.80 and a P/B of 1.00.

HomeStreet Inc. operates as a full-service community bank serving consumers and businesses in the Pacific Northwest and Hawaii. The company's primary subsidiaries are HomeStreet Bank and HomeStreet Capital Corporation. HomeStreet Bank is a Washington state-chartered savings bank that provides deposit and investment products and cash management services. The company also has mortgage loan offices in the Pacific Northwest, California and Hawaii and four commercial lending offices in the Puget Sound region.

The company reported third quarter 2013 financial results with a net income of $1.7, down from $12.1 million in the same quarter of 2012. Earnings per diluted share were reported at $0.11, down from the same quarter of last year with an EPS of $0.82. The company reported that deposit balances had increased by 6.9% from the second quarter of this year, and were at $2.10 billion.

On Nov. 1, 2013, HomeStreet announced that it had acquired Fortune Bank and YNB Financial Services Corp., the parent of Yakima National Bank, merging into HomeStreet Bank. The combined organization had assets of approximately $3.1 billion as of Sept. 30, 2013.

Guru Action: One guru holds HMST shares as of the second quarter of 2013. There is very active insider trading.

As of June 30, 2013, NWQ Managers is the sole guru stakeholder, holding 844,411 shares, after increasing its position by 11.21%. The firm’s shares represent 5.86% of shares outstanding.

As of the second quarter, NQW Managers bought 85,090 shares at an average price of $22.03 for a loss of 14.6%.

Over six quarters of mixed results, the firm has averaged a gain of 24% on 1,071,720 shares bought at an average price of $15.15.

The firm took a loss of 19% on 227,309 shares sold at an average price of $23.33 per share.

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GuruFocus Real Time Picks reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only.

Check out the GuruFocus special feature 52-week low screener to find the stocks hitting new lows but are still held by top investor Gurus and Insiders.

About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 4.5/5 (2 votes)

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